Russia's VimpelCom Buys Wind Mobile In Canada

silverpig writes "Wind Mobile's CEO and Chairman Tony Lacavera announced on the Wind Mobile site that VimpelCom has decided to purchase Wind Telecom for $6 billion. The deal should go through by the middle of this year and may give Canadians cheaper international and roaming rates, as well as giving Wind some extra leverage with its suppliers and handset manufacturers. The deal is particularly interesting, as Wind is one of the new entrants into the Canadian wireless operator industry and has had to deal with issues regarding Canada's foreign ownership rules. Expect a lot of scrutiny from the CRTC, Bell, Telus, and Rogers."

Comments

Re:Why can companies buy other companies ?

[WrongSizeGlass]

Ok, capitalism, blah, blah, blah... but can anybody tell me WHY are companies allowed to buy other companies?

Economies of scale should result in lower consumer prices (in theory), combined management, operations, IT, etc saves money, etc etc. If you want a world where companies can't buy other companies then we'll have a bunch of companies that go out of business. For example, YouTube could never make a profit if it had to pay for its own servers & bandwidth requirements. Piggybacking on Google it can and does generate a profit.

Re:One thing's really been bugging me.

[green1]

Wind? According to their adds it is pronounced the same way as moving air outdoors.

As for the topic at hand. In Canada it is illegal for a telecom company to have more than 30% foreign ownership. Wind was owned by an Egyptian company violating those rules, as such the CRTC banned them from operating in Canada, the federal government then overode the ban (but didn't change the rules) making Wind the only foreign owned telecom company allowed to operate in Canada. Recently a federal judge overturned the exemption and sent it back to the government saying that they had to make everyone play by the same rules (either ban Wind from operating in Canada, or allow other foreign companies the same leeway, and gave Wind 60 days to comply/appeal. Now the Egyptian company is solving their foreign ownership problems by becoming Russian owned instead of Egyptian... somehow I don't think that helps.

Our government really needs to make up it's mind. Either allow foreign ownership of telecoms (and open up our telecom industry to real competition) or kick Wind out. The double standard has got to go.

Re:One thing's really been bugging me.

[grub]

Rogers, Telus and Bell will be whining to the CRTC about it again.
They don't like real competition to their price fixing and overpriced plans.

What Canada needs is foreign competition in the ISP market and to scale back the powers of the CRTC. The whole UBB fiasco has proven that the CRTC isn't acting in the interest of Canadian consumers, it shows they're in the pocket of the communications giants.

Foreign ownership rules

[mirix]

They really need to get rid of the foreign ownership ban.

Is the fact that the oligopoly that is raping me happens to be Canadian supposed to make me feel better?
Lets get some real competition.

Then maybe we can get things like Europe, where charging for incoming calls is looked upon like the insanity it is. Fair data and SMS rates, etc. Fucking crooks.

Re:Foreign ownership rules

[Capt.DrumkenBum]

Testify brother!
I recently decided I was done with Fido. 3 years of terrible customer service was enough. So I went down the street to Bell, and got better service for the same money. Only one problem, I went to Bell 3 days before my contract was up with Fido. That mistake cost me a $100 early cancellation fee. I attempted to fight it and those bastards sent me to collections. I would have continued to fight it, but my mortgage is coming due in a couple of months and I don't need a black mark on my credit report.

In case anyone doesn't know, Fido is a division of Rogers.

Re:One thing's really been bugging me.

[kevinmenzel]

How does scaling back the powers of the CRTC help the consumer though? If the complaint is that the CRTC swings too much in the direction of the major powers, I don't see how handing all power over to those major powers by virtue of their entrenched market position wouldn't be actually quite a bit worse...

Get rid of ownership requirements

[Philodoxx]

Now I would understand the need for ownership requirements if the Canadian telcos treated its customers well and were just afraid of bigger meaner foreign companies running them out of business. That imaginary scenario couldn't be further from the truth. Only good things can come from competition in the Canadian wireless market and international companies are the best place to get that competition. /soapbox

Re:Get rid of ownership requirements

[realityimpaired]

Not entirely sure what world you're playing in, but in this reality, Bell is already operating call centers in India, the Phillippines, and Tunisia.

There's nothing about the foreign ownership rules that preclude a Canadian company from having a stock in a foreign company. The inverse is true, but we can own foreign companies.

Not exactly

[telso]

This Russian company didn't purchase the Canadian company. They purchased Wind Telecom S.p.A., a company owned by an Egyptian family. That company owns 50%+1 of Orascom, which itself has a complicated relationship with Globalive, a Canadian* company that operates Wind Mobile, an upstart wireless telephone service provider in Canada. "Complicated" and "Canadian*" because the Federal Court disagrees it's Canadian, as I wrote last month.

Re:Not exactly

[Esteanil]

Not to mention that this "Russian" company is ~40% owned by Telenor, the former Norwegian telephony monopoly. (Used to be owned by the state)

Re:Not exactly

[Rakshasa Taisab]

Not to mention Telenor, the Norwegian telecom company, has been in long court battles fighting what is essentially a russian-style theft of the company Wimpelcom. The Wind Mobile company isn't worth anywhere near 6 billion dollars.

Re:This could be good

[wazoo666]

My roaming charges when outside the Wind's coverage area are actually lower than my daytime Rogers rates.