Wind Mobile backer regrets Canadian launch

[BillytheGreek]

http://www.cbc.ca/news/business/stor...s.html?cmp=rss

I am surprised no one picked up on this story.

I like how Naguib Sawiris,he billionaire financier behind the Wind Mobile attacks the Canadian government for not opening up to foreign direct investment for foreign capital. He compares us to China as the worst countries to invest.

But My favourite quote from his is when he challenges the "Big three" wireless companies

"You need to ask yourself, why isn't Rogers in the U.K., like Vodafone or France Telecom," he said.

"Why aren't they everywhere if they're so good? The answer is simple, here they're protected. They can be inefficient, their cost structure can be expensive."

We all know he won't get his ways but at least he is trying.

[hugh]

He has said the same thing before Harsh words from Wind backer so I guess its a bit of, "so what else is new?"

FWIW, I think much of the criticism of our Telecom policy and rules regarding Foreign Investment in the Telecom industry are antiquated, however, Canada is hardly alone in this regard.

Having said that, I fume at an Egyptian company that has made a fortune in dictatorships such as North Korea, Egypt and Algeria calling Canada a backwater in the same week that the military has killed protesters in Tahrir Square who wanted the military to stop torturing civilians and running the country.

Dictatorship aside, you have to wonder, if he didn't like our politics then why invest in the Country? Orascom knew going in what the rules were.

[beanagee1]

According to this G&M article, Tories are looking to change the foreign ownership rules for players with less than 10% market share.

[TorontoColin]

I think this deserves a resounding "meh".

He knew what it was like before he invested, but at the same time it can't hurt to try to complain and see what happens.

I can see it being frustrating having worked in totalitarian states to have to deal with all the bureaucracy in a country like Canada. Don't get me wrong, I definitely am not advocating dictatorships, but they do get things done without the red tape we face here, which from a business' perspective is a positive.

Sawiris also operated Wind in Italy and Greece, so he does have some experience in more westernized democracies. However, Canada is different, because we have the massive US right next door, which impacts all these decisions.

[mrvanwinkles]

On Saturday Dec 31, 2011 - 3AM - 4AM EST on CBC Newsworld Channel.

I watched program: The Lang & O'Leary Exchange

They interviewed Mr Nagim Sawaris, head of Orascom Telecom of Egypt.

( Orascom Telecom is the head company associated with the Wind Mobile startup in Canada)

So Ms Lang interviewed Mr Sawaris and it was a very interesting discussion.

I will try and summarize:

Mr Sawaris gave a very open and honest assessment of the experience of the Wind Mobile entry into the Canadian wireless and telecom market.

In short, Mr Sawaris said:

- the big 3 Canadian telecom companies are protected by current regulations

- the big 3 are putting up roadblocks to competitors trying to enter into the market by "bidding up" the cost of wireless spectrum for new entrants during those "bidding auctions"

- his company did *NOT* receive what was promised to him originally by Industry Canada regarding Tower Sharing or Frequencies (spectrum)
- he has some regrets regarding entry into the Canadian Market

- compares Canada to China with regards protectionism and non-competition in the industry ("In all the World ...only Canada and China have such protectionist and isolationist policies in the industry")

- wonders why the big 3 in Canada (ex Rogers, Bell) exist only in Canada and don't have operations anywhere else in the world - like, for example, his company. ( He was asserting that the big 3 in Canada have it nice and comfortable and cushy in Canada, nice easy profits and monopoly like protection, due to protectionist regulations and policies and restrictions and difficulties for new entrants, and just can't compete / choose not to compete in the rest of the world - like other world companies, like his own. And is wondering just WHY that is.)

- and when asked by Ms. Lang - hopes that with this interview he is sending his message to the Canadian Government.

[gzink]

I believe that was a November interview replayed. Sour grapes. He doesn't offer service where I am so I suppose I shouldn't comment further.

[PokerFace]

I saw the interview when it first aired in November (how you doin', Amanda?) and my first impression was that Naguib Sawiris was a cool dude (with sour grapes) and that CBC was perhaps grooming him to replace either Don (Grapes) Cherry (on Coach's Corner) or Kevin O'Leary (on Dragons' Den).

Plus, Super Channel will probably try to buy the broadcasting rights for the fake Egyptian TV series entitled: My Three Sons of Sawiris.

However, after reading the other threads and related articles (etc.) about the man, I'm pretty sure he's just good at pretending to be someone he's not.

Some of the related threads/articles:

http://www.digitalhome.ca/forum/showthread.php?t=148351
[Wind Mobile backer regrets Canadian launch]

http://www.cbc.ca/news/business/stor...s.html?cmp=rss
[The Lang & O'Leary Exchange: Wind Mobile backer, Naguib Sawaris, regrets Canadian launch]

http://www.digitalhome.ca/forum/showthread.php?t=128911
[Harsh words from Wind backer]

http://www.digitalhome.ca/forum/show....php?p=1359054
[Wireless upstart model failing, future grim: analyst]

http://www.digitalhome.ca/forum/showthread.php?t=148316
[Wind Mobile now has 358,000 subs]

http://www.digitalhome.ca/forum/showthread.php?t=140467
[Wind Mobile gains more subs than Bell, Rogers or Telus in first quarter]

[mrvanwinkles]

Many are saying "Sour Grapes" - but I, for one, believe the Man is just being sincere in expressing his frustration at the difficulties in trying to enter the competitive Canadian telecom market.

Knowing what I know about the industry - from experience working in it as a former telecom employee- several competitive companies - I do believe the "Big 3" will do whatever they can to keep any new competitor OUT.

And I mean ANYTHING.

or ... they will make it so difficult and expensive for any new player to establish themselves - that the new player will eventually just have to retreat.

It is a huge massive undertaking to build up a National network to be able to compete in Canada. And for what? One piece of the pie?

Many other competitive companies in the recent past have come and gone.
Bought, sold, merged, bankrupted, pushed over the edge, infiltrated etc etc. You name it ... it's all been done.

As for the Canadian Government - good luck.

[gzink]

You just described "doing business". Dirty tricks are everywhere.

[mrvanwinkles]

Yes. "Business". We're agreed on that. Busy - ness.

Get those "Busy" Business people out of your life - much as possible.

[mrvanwinkles]

Some Quotes from the closed thread: Harsh words from Wind backer

Arthur Dent, post # 9
He also discloses that two of the Big Three have already offered to buy him.

-AND-

cdn tbird, post # 21
“I have been offered by two of them to buy me out at a very significant profit,” Mr. Sawiris said. “But that means I’m a broker, not an industrialist. It’s against my saga, against my history. I’m not the kind of guy who goes out for the money. It’s about success. And this, I would consider it as a bribe.”


So some of the Big 3 have already tried to BUY OUT the coming competition.
I have seen, and personally been through one of these "Buy Outs" in the industry. That sucked.

And so I say ... good for you Mr Sawaris for not selling out.
Hopefully you can stay the course, not sell out, and make the 4th player in Canada.


Rickety Rabbit, post # 33
It will be impossible in the long-term for Canadian telcos to compete with international giants. They can leverage their deep pockets and superior scale to cut prices


YES !

This is the key. If Wind can use this "international" source of financing (and expertese) to get their Canadian national network up and running, and finance it to a point to get profitable - then they will make the 4th player.

And this is why the Canadian "Big 3" should indeed be concerned - because Orascom *IS* international - and can draw on those diverse resources to stay the course - hopefully.

The amount of money and time required to get this sort of national network up and running and profitable in Canada is very large.

Does Canada actually need a 4th player? Probably not for service. But for customer prices and healthy competition in the industry, probably YES.

Only time will tell how this will turn out in Canada for Wind Mobile.

There can be many other pitfalls in this industry - it's complex.

Something else / something totally different could end the 4th player's bid.

[Rockjock]

Didn't he already sell wind to Vimpelcom? I have never put much stock into what he says, I can see this as a case of sour grapes. The fact that it is much harder for him to get a foot hold in Canada is nothing new. I mean they are the experts no? They have vastly more sums that all of the big 3 combined and yet make scarcely as much as rogers does in profits. Sour grapes yes.

BUT if Vimpelcom indeed is the new owner, why is he saying that they will not bid unless they get a deal?


I guess in a few weeks we will know whats going on. Personally I have contacted Vodafone and asked them if they would like to bid. I will do as Tony did and offer up my citizenship and the spare room that is my office as the legal business location.

I do own a telecom company ( RockJock wireless GmbH ) from the house to the garage out back. 5 bars...

[mrvanwinkles]

It's hard to figure out what any of them are doing sometimes in that industry.

It's like a big bordello.

They're always changing names, products, technologies, hardware, software, management, boards of directors - you name it.

Selling themselves, buying someone else, new share offering, share splits, share buybacks. Voting and non-voting shares. Buying "content" at massive prices.

New alliances, old alliances breaking up.

"Business as usual" was the phrase they always used to use.
( and I used to think ... "BS as usual". and hear: "Business based on BS."
when referring to that industry, generally. )

Quite a Cluster Bleep ... just the nature of that sort of business, I guess.

My advice: Don't get too cosy with any of them.
(ex. by having all your services with one company through Bundling, or by getting into Long term contracts, or by investing alot personally there )

(Putting all your "communications" or "telecommunications" eggs in ONE basket with any one carrier or company may give you some savings and convenience - though bundling of all your services ... but that could also lead to a nightmare if you start having "difficulties" with that one carrier.)

[Jakeman3]

This kind of begs the question that if the big three are enjoying fat profits with the help of federal protection. Then why aren't any of them making effort to expand into international markets?

[753951]

Maybe because they wouldn't enjoy that protection internationally, and would get their collective behinds kicked?