Canada takes cautious approach to increasing foreign telecom ownership

The Canadian Conservative government has moved to give foreign companies a chance to have an ownership stake in its country's telecom companies.

However, the government has taken a "cautious approach" that allows non-Canadian-based companies to acquire service providers that have a market share of only 10 percent or less.

Stephen Harper, Canada's prime minister, has said he believes there are two benefits to enabling foreign companies to invest in the country's CAD 40 billion (USD 40.3 billion) telecom sector: more competition and lower prices for consumers.

The presence of foreign investors could pose new competitive challenges to its three largest service providers—Bell Canada (NYSE: BCE), Rogers Communications (NYSE: RCI) and Telus (Toronto: T.TO).

"This targeted action will remove a barrier to investment for the companies that need it the most," industry minister Christian Paradis said at a news conference, adding that the government would like to see a fourth service provider offer services in any part of Canada. 

While Harper has been an advocate of increasing foreign investment in Canada's telecom market, these proposals have been met with opposition from the Canadian Radio-television and Telecommunications Commission (CRTC). In 2010, the CRTC asked the Canadian government to retain rules that prevented foreign companies from owning a large stake in any of the country's telecom or broadcasting companies.

For more:
- see this Reuters article

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