Telus pursues changes to Canada's foreign ownership rules
Incumbent telecom service providers in Canada are campaigning for a relaxation on that country's rules on foreign ownership of their firms. Western Canadian service provider Telus (Toronto: T.TO) is the latest firm to stoke that debate, proposing a gradual change to give incumbent operators greater access to foreign investment over the next three to five years.
It should not be seen as a coincidence that Telus is getting vocal about the foreign ownership rules just a few weeks after U.S. hedge fund Mason Capital lowered its investment stake in Telus from about 19 percent to just over 3 percent. At issue in that decision was Telus' policy of classifying ownership shares as common and nonvoting to comply with Canada's foreign ownership rules, a policy that Telus is now attempting to change.
While non-incumbent service providers in Canada already can be 100 percent owned by foreign firms, incumbent operators can relinquish no more than 33 percent equity for foreign investors. Telus and others argue that this amounts to an unfair advantage for their newer competitors, though it also has not escaped their attention that a bevy of foreign investors from the United States, Europe and elsewhere right now seem more than willing to help them fill their corporate coffers in exchange for a piece of Canadian market action.
The foreign ownership issue may be the rare occasion that Canada's incumbent operators agree on something. Telus and fellow incumbent Bell Canada faced off on the regulatory front last year when Telus protested Bell Canada's acquisition of Astra Media.
-read this Globe and Mail report