Canadian start-up operator Globalive is expected to appeal a ruling this week that found it in violation of federal ownership rules, reports Canada’s Globe & Mail newspaper. In a statement, Globalive chairman Anthony Lacavera described the ruling by the Canadian Radio-television and Telecommunication Commission (CRTC) as “a bad day for Canadians and wireless competition in Canada.” However, he insisted that the verdict had only delayed its launch and – according to sources – the company is now set to appeal directly to Canada’s federal government. At the heart of the issue is Orascom’s economic stake in Globalive; the Egyptian operator owns a 65 percent equity interest as well as virtually all of the start-up’s debt. According to the Globe & Mail, under CRTC rules, a Canadian operator is eligible to operate as long as it is a Canadian-owned and controlled corporation. At least 80 percent of the board of directors must be Canadian, at least 80 percent of the voting shares must be owned by Canadians, and the company cannot be indirectly controlled by non-Canadians via holding companies.

Globalive paid about CAD442 million (US$406 million) last year to acquire airwave licenses and was gearing up to launch its first services in the next few weeks. Opposition to the start-up has come from Canada’s three incumbent mobile operators – Bell, Telus and Rogers – which all opposed Globalive at the CRTC hearings last month. They argue that allowing Globalive’s ownership structure would open the door for other firms to seek large amounts of foreign investment and disrupt the market.