Canadian Government Up Against $1.3 Billion Claim From GTH

There is never a dull moment in the world of Canadian wireless – mostly because the government plays such a significant role in okaying sales. These decisions are made in a quest to help foster competition and take some of the power away from the Big Three carriers – Rogers, Bell, and Telus. Canada officials are hoping that another big player will enter the game and offer up some real price competition – much to their dismay, this has not happened. The expense for infrastructure, expanding, and maintaining, are just too much for a new company to take on.

In an effort to spark some competition, back in December 2015, Wind Mobile agreed to terms with a Shaw buyout that cost Shaw $1.6 billion. Industry Canada and the Competition Bureau had approved the deal – as we said, all of these types of purchases have to go through the Government, and the final agreement went through in March 2016. The previous owners of Wind Mobile, Global Telecom Holdings (GTH), have filed a $1.32 billion suit against the Canadian Government. They claim that Wind Mobile was denied the opportunity to buy up spectrum and businesses after five years following a 2008 spectrum auction in the country, an opportunity which was said to be afforded to Rogers, Telus and Bell. Because of this, GTH wants a minimum of $1.32 billion in payback because, “Canada failed to create a fair, competitive and favorable regulatory environment for new investors in this sector.”

The representative speaking to the Globe and Mail could only give out a few conclusions since the details of the suit are confidential, but insisted that it was a direct result of Canada’s Government that caused GTH to sell Wind Mobile for a significantly lower price that they could have received. Global Affairs Canada said that the Government would “vigorously” fight the Global Telecom Holding. This lawsuit is not the first go-round for the Government – the previous owners of Mobilicity filed a similar lawsuit for $1.2 billion in 2014. They claimed that Industry Canada “breached its assurances” made to Mobilicity. There is always turmoil in Canada - most likely the Canadian Government will win the case, but whatever happens, let's hope that the consumer will benefit.

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