Russia's VimpelCom Buys Wind Mobile In Canada 63
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."
Why can companies buy other companies ? (Score:2)
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Ok, capitalism, blah, blah, blah... but can anybody tell me WHY are companies allowed to buy other companies ? I mean if the owners/investors in company A want to purchase (stock in) company B and make them work together, then go for it; but I don't understand why a company should be allowed to purchase another one.
In Soviet Russia company owns YOU.
...
Come to think of it, that's how it works in the Capitalist world, too.
Think of a corporation as being the embodiment of a business, with rights and responsibilities similar to those of an individual. An individual may own one or more companies. Why not a Corporation?
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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.
Why not? (Score:2)
There's some pretty clear reasons: clients, assets, market share, talent, etc.. Basically it's still the capitalism argument: the company exists to make money for its shareholders, and buying another company will make it more money... or so's the idea.
In context with how businesses operate I don't see this as good or bad. As a business owner you're no more or less removed from liability than you already are as a shareholder. If your comment was aimed at keeping the owners within one degree of separation fro
One thing's really been bugging me. (Score:2)
Re:One thing's really been bugging me. (Score:5, Informative)
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.
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Think of it this way: Wind is nothing more than a bunch of hot air moving into a depression. I always figured it was a short i just based on their logo and print ads.... I'm sure they define Wind as "a breath of fresh air" instead of "a load of hot air" though.
Re:One thing's really been bugging me. (Score:4, Insightful)
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.
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I think you misunderstood TELUS, Rogers, and Bell. They have never said "we don't want Wind to be allowed to compete in Canada" they've said "we want a level playing field, if they can get foreign investment, we want to be able to too."
And I can't blame them for it. This is actually not a CRTC problem, the CRTC was only upholding the law as made by the government. It is up to the government to fix this mess, not the CRTC.
By giving Wind an exception to the law, they not only limited competition in Canada, bu
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TELUS has specifically stated in the media that this is what they want, they have also been lobbying the government for this, and have testified to this point in court.
So I'll take their actions to speak louder than your random guess on slashdot.
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If they truly wanted more competition they would have changed the law itself to allow any company to come in, something they haven't done. And believe it or not, the big telecoms in Canada are pushing for the same thing Wind wants, more relaxed foreign ownership rules.
The original purpose of those foreign investment rules was to keep the profits and control of communication within Canada. That means that the decisions of the companies actually affect the people who made them.
In theory, it's less desirable for someone to make a "fuck everyone, profits or death" kind of decision if it is going to directly affect your own family, and your neighbors, and the guys you golf with, etc.
Also, keeping the profits within the national borders is better for the local economy.
This
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My statement was in regards to inconsistency in the application of the current laws, not a statement about my preferred situation.
Basically the government needs everyone to play by the same rules, either everyone is allowed foreign investment, or nobody is. They can't go doing the one off exceptions like they did for Wind.
That said, my personal preference is to remove the foreign ownership rules to allow more competition, but only with corresponding consumer and infrastructure protection rules to offset th
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We don't need foreign competition: we need to make the last mile a public utility and let any Canadian owned company compete at the retail level. Then the CRTC can go back to managing spectrum allocation for a dying industry.
And since the topic was Cell Phone Service, I'd suggest that cell-towers also be run as a public utility; again letting whomever run a retail business.
And this isn't crazy; anyone out
Not that simple (Score:2)
From what I heard its not quite as all clear as that. The way they worked it to intentionally get around the rules. Basically Wind is Canadian owned, however they got pretty much ALL their capital from an Egyptian company. So they own pretty much all their debt. As such some of the Egyptian Execs sit on the board, but is still dominated by Canadians.
In this way they beat the law about foreign ownership. The other telecoms in Canada being the monopolistic greedy MF that they are caused a stink and had the CR
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No, they never followed the law, they tried to invent a loophole that didn't exist. The CRTC knew this, the courts knew this, it's only the government that pretended that it was ok, and in fact they didn't even state that Wind was following the rules, they instead ruled that "in the interest of increased competition" they would waive the requirement for Wind... but ONLY for Wind.
The courts ruled that the government broke the law by doing this.
This isn't a case of Wind following the law and the big bad CRTC
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Well you sort of agree with me.
The courts interpret the law, that's their job, so when they rule "Nope", that was the first nail on the coffin that says "sorry that's not a loop hole". Wind and the Conservatives can interpret however they like and as seen recently with the election fraud etc... the Conservatives can be pretty loosy goosy with "interpretation". However if all that said was "in the interest of more competition" that's sort of the most retarded thing I have ever heard. Its like having a law ag
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TELUS has been in court, in the media, and lobbying Government to loosen foreign ownership restrictions. Doubt their motives all you want, but that doesn't change which side of this issue they're on.
Sure I'll admit they aren't doing it to be nice to the competition, but they have decided that the benefits (more money in their pockets from foreign investors) outweigh the risks (a startup stealing enough of their customers to be a real problem)
Hahahaha (Score:1)
"Expect a lot of scrutiny from the CRTC, Bell, Telus, and Rogers."
Same thing!
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Not exactly. CRTC is pushing to maintain the rule of law. The law says no more than 30% foreign ownership in Canada, so that's what the CRTC is enforcing. If the government changes that law, the CRTC will enforce whatever the new law says instead.
Bell, TELUS, and Rogers are after something different, they want the rules on foreign ownership relaxed, they are actually on Wind's side (sort of), What they DON'T want though is an exemption for one specific carrier as the government illegally put through origina
Foreign ownership rules (Score:5, Insightful)
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 (Score:4, Informative)
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.
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Just a quick note on your Fido story - I had a similar problem with Telus once.
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I got them to refund the $100 after an extremely heated and profanity laced phone call. The extra month of service
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Be careful what you wish for ... in a way selling off your domestic economy to foreign owners is similar to trade deficits, in both cases as a country you are borrowing against the future. Except trade deficits just result in national debt, which can be inflated away ... foreign ownership is harder to reverse (which is exactly why the trade surplus countries, like Russia, are switching from buying bonds to buying companies).
Obviously your internet situation sucks balls ... but foreign solutions are not nece
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I could see that if it were state run perhaps, but otherwise, what is the difference? The outfit pays tax here regardless who owns it. The linesmen hanging from the towers are the same. Whether the CEO is in Toronto or Moscow is immaterial, as sweet fuck all trickles down anyhow.
Perhaps I'm oversimplifying, though.
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The foreign ownership rules are there for a completely different purpose. The theory is that telecommunication is critical infrastructure, and as such we don't want someone from a foreign country dictating who can talk to who and how.
Personally I think that a better option would be to remove the ownership requirements, but make sure that there are appropriate laws in place to safeguard the infrastructure against such changes.
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We don't need foreign ownership; we need the socialise the last mile and let competition run at the retail level.
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Charging for incoming calls in Europe doesn't happen because all cellphones in Europe are identifiable, so callers know when they call a cellphone. The reason for this is obvious - the caller pays for the call.
If you can get everyone to change their phone numbers (a new area code to signal "cellphone"). It's one of the reasons why texting is really
Welcome to VimpelCom (Score:2)
Welcome
Anything is possible at VimpelCom
VimpelCom is what you make it
The only limit is yourself
The unattainable is unknown at VimpleCom
Yes
Get rid of ownership requirements (Score:3)
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Only good things can come from competition in the Canadian wireless market and international companies are the best place to get that competition. /soapbox
Right. Because there is no value whatsoever to sovereignty.
Don't be too eager to sell control of the countries critical infrastructure to another country. That's the sort of thing that can really bite you in the ass in the long run in all kinds of really nasty ways, even if it looks better in the short run.
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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 (Score:5, Interesting)
This Russian company didn't purchase the Canadian company. They purchased Wind Telecom S.p.A. [wikipedia.org], a company owned by an Egyptian family. That company owns 50%+1 of Orascom [wikipedia.org], 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 [slashdot.org].
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This could be good (Score:2)
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And why the hell would the carrier has to offer handsets and lock me in.
You're asking and answering your own question there. It's offering you the phone in order to lock you into their contract.
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Wind has no coverage at all outside of cities. If you're getting any coverage, you're in a roaming zone, which means you're actually using a Rogers or Bell GSM tower rather than a Wind tower.
And within the city proper, you may or may not actually be using a Wind tower. I live within the urban transit area in Ottawa... outside the greenbelt, but close enough to the center of town that I get regular bus service. I also happen to live *just* outside Wind's coverage area. If I switched to them, I'd be on roamin
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For voice. What about data?
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Just buy the phone outright. Consider the following cost breakdown, which I did for myself:
TMobile Vibrant from eBay: $500
Wind service: $35 + tax for voice/text/data = $39.20 after tax
Three years of service and a phone: $1911.2
Subsidized Vibrant from Telus: $200 w/ 3 year contract
Similar service plan, after hidden fees and taxes: approx. $55-$60 per month
Three years of service and a phone: $2180-$2360
Wind wins, even with a crappy in-store phone selection.
CRTC = Bell + Telus + Rogers (Score:2)
Expect a lot of scrutiny from the CRTC, Bell, Telus, and Rogers.
Quite a bit of redundancy in that statement, considering that CRTC is basically the law making arm of the latter three. The vice-chairman of CRTC used to a VP at Rogers for 15 years. [linkedin.com]
This won't fly (Score:2)
Don't they realize that Canadian regulators will look at this and laugh?
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Seen in a headline (Score:2)