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Orascom Pulls Request for Wind Mobile Acquisition Approval

Orascom Telecom Holding SAE, the Egyptian wireless carrier, withdrew its request for regulatory approval to acquire Wind Mobile, forcing the Canadian operator to review its investment options.

Orascom “continues to be interested in consolidating its interest in Wind Mobile Canada and is working with the government of Canada to achieve this goal,” according to its statement today. Cairo-based Orascom didn’t say why it withdrew the application, made under a Canadian law that governs large investments by foreign companies.

Wind Mobile, the largest of three recently created wireless operators based in Ontario, has drawn interest from Orascom and, since Canada’s government moved to block big local carriers from buying smaller rivals, from Verizon Communications Inc. Verizon, part owner of the No. 1 U.S. wireless operator, said yesterday that Wind Mobile is “one of many” options it’s considering.

Under the deal that was withdrawn, Orascom would have acquired a 99.3 percent indirect stake in Wind Mobile parent Globalive Wireless Management Corp.

Globalive Chief Executive Officer Anthony Lacavera said today that he will continue to control two-thirds of his Toronto-based company’s voting shares, with Orascom holding the rest. Orascom, which is controlled by Vimpelcom Communications OJSC, will keep a total Globalive stake of 65 percent.

“Despite this speed bump, I’m going to continue to work with Vimpelcom toward our mutual objectives,” Lacavera said in the telephone interview. “It doesn’t change my long-term commitment to competition in the market.”

Blocked Deal

Earlier this month, Industry Minister Christian Paradis blocked Telus Corp.’s C$380 million ($373 million) acquisition of another recent entrant, Mobilicity, part of his pledge to foster conditions for a fourth national carrier to emerge. Telus, Rogers Communications Inc. and BCE Inc. control about 90 percent of the Canadian mobile-phone market by subscribers.

In an e-mailed statement today, Paradis confirmed that the Orascom application has been withdrawn and that the review process has ended. He declined to elaborate on the reasons for its withdrawal.

Vimpelcom is based in Amsterdam, and its biggest operations are in Russia. Much of Wind Mobile’s wireless infrastructure was built by Huawei Technologies Co., a Shenzhen, China-based maker of telecommunications equipment that has been blocked from providing gear for Canadian government networks.

“Vimpelcom made statements about there never having been a breach” of security with its networks, “and I would echo those statements,” Lacavera said. “Cybersecurity threats are by far one of the biggest threats facing our nation. This is an ongoing, iterative process.”

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