Canadian Government Promotes Foreign Investment in Mobile Telecoms Carriers

The Canadian government recently introduced legislation to amend the Telecommunications Act to permit foreign ownership in Advanced Wireless Services Entrants (AWS Entrants), which are telecommunications carriers having less than a 10% share of the Canadian market by revenue. According to the government, the amendments are intended to promote competition and investment in Canada’s telecommunications industry, which comprises about 2% of Canada’s GDP and generates $40 billion in annual revenue. Currently, the Telecommunications Act limits the extent of foreign ownership to 20% of the carrier itself and to 33.5% of the carrier’s holding company, and permits the CRTC to review such arrangements to ensure that they are not, in fact, controlled by foreign entities. In 2008, in order to spur competition in the mobile telecoms sector, the relevant federal department, Industry Canada, set aside portions of Canada’s wireless spectrum for AWS Entrants. Since then, mobile wireless prices have fallen by more than 10%. The proposed amendments are expected to advance this trend by encouraging foreign investment, and enhancing the competitive position of AWS Entrants in relation to other carriers in auctions for wireless spectrum licences. The government’s goal is to enact the proposed amendments by the end of 2012, in advance of the upcoming 700 MHz wireless spectrum auction in the first half of 2013 and the 2500 MHz auction in 2014. It will be interesting to see whether this deadline can in fact be attained. For a link to the proposed legislation, visit: http://tinyurl.com/89uot8q; and For a link to an Industry Canada policy document regarding the upcoming mobile spectrum auctions, see: http://tinyurl.com/6togjpv Summary by: Darren Hall