Ottawa changes foreign ownership rules for small wireless firms


Canadian cable and broadcast giants are taking note: Ottawa has ended foreign ownership limits on small telecom companies to encourage more inward investment.

Federal industry minister Christian Paradis on Wednesday said Ottawa will amend the Telecommunications Act to exempt telecom companies with less than 10% of total  Canadian market revenue from foreign investment restrictions.

And companies that succeed in growing their market share beyond 10% of domestic telecom revenues, other than through mergers or acquisitions, can retain their exemption from foreign ownership restrictions.

Even as Ottawa throws a bone to small wireless operators on access to foreign capital, Industry Canada insisted current restrictions on foreign ownership under the federal Broadcasting Act will remain in place for all domestic broadcasting distributors.

But in a Canadian industry with few pure-play telecom players, amid technological convergence and vertically integrated media companies, domestic cable and broadcast players will be eyeing the new rules on foreign cash for wireless firms for an opening where they too can call for reciprocity in national legislation on foreign ownership rules down the road.