Winnipeg-based Manitoba Telecom Services said Monday the federal government has rejected a deal for it to sell its business unit, Allstream, to Egyptian investment group Accelero Capital due to "unspecified national security concerns." (CBC)
One Winnipeg security expert says he's not surprised Ottawa has rejected the sale of MTS Allstream to Egyptian company Accelero.
Peter St. John of the faculty of political studies at the University of Manitoba said the telecommunications company is as important for Manitoba as potash is to Saskatchewan.
"I think this is an essential service for Manitobans, just as potash is really important to Saskatchewan," he said. "And I would think for the same reasons, the prime minister might not allow a [deal] like that."
St. John said the Conservative government sent a message to business when it rejected the sale of Saskatchewan's Potash Corp to an Australian company in 2010.
St. John said the possibility of a foreign country intercepting Canadian government messages via MTS technology is a real concern, "Especially from an unproved source, like Egypt." Another factor, is the instability of Egypt.
But CBC business reporter David Blair said the rejection comes as the federal government is trying to increase competition in the cell phone industry.
"It just adds another level of complexity and even confusion for attracting foreign investment to this sector," Blair said.
And he said, Accelero is no stranger to Canada.
"This, by the way, is the same company that backed Wind Mobile in its entry into the cell phone business in Canada, he said. "This company is backed by people who already have a history in the Canadian market."
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