Feds approve Rogers-Shaw merger under "strict conditions" to drive down prices

Mar 31 2023, 1:19 pm

The federal government has approved the proposed merger between Rogers and Shaw under a long list of “strict conditions.”

Federal Industry Minister François-Philippe Champagne spoke to the Canadian public on Friday morning from the Parliament, announcing the merger.

“Affordability and competition are central to any decision I make in my role as Minister of Innovation, Science and Industry,” he said.

“That’s why last October, I officially denied the request to transfer Shaw’s wireless spectrum licences — held by their subsidiary, Freedom Mobile — to Rogers. At the time, I also outlined my expectations for the separate proposed transfer of Freedom Mobile’s spectrum licences to Videotron.”

According to Champagne, the Competition Bureau, the Competition Tribunal and the Federal Court of Appeal have all weighed in since then and agree on the “potential competitiveness a fourth national player could have on our telecom industry.”

“The evidence is clear: Having a strong fourth competitor does lead to lower prices, as we’ve Atlantic provinces, Quebec, Ontario, Alberta and British Columbia,” the industry minister remarked.

Freedom Mobile’s licences will be transferred to Videotron, creating a fourth national competitor in the telecommunications arena and, ultimately, driving down prices for Canadians.

In a release, the government outlined that as part of this deal, Videotron:

  • Will offer plans that are comparable to those currently available in Quebec and offer options at least 20% cheaper than those made available by the major players;
  • Cannot transfer the Freedom Mobile licences for 10 years;
  • Will have to expand its 5G wireless network in Freedom Mobile’s pre-existing operating territory within two years;
  • Will expand mobile service into Manitoba via the use of a signed Mobile Virtual Network Operator (MVNO) agreement or other means and offer plans comparable to what it offers in Quebec; and,
  • Will increase data allotments of existing Freedom Mobile customers by 10% as a near-term bonus while it invests in bringing down prices overall.

Rogers will also be legally bound to make significant investments in the next five years to boost connectivity. Its goals include:

  • Creating 3,000 new jobs in Western Canada and maintaining them for a minimum of 10 years after the closing date;
  • Establishing a Western headquarters in Calgary and maintaining it for a minimum of 10 years after the closing date;
  • Investing $1 billion to expand broadband Internet access, at speeds of at least 50/10 megabits per second, and 5G mobile service in areas where it is not currently available;
  • Investing at least $2.5 billion to enhance its 5G network in Western Canada and $3 billion in additional network service expansion projects; and,
  • Expanding access to low-cost broadband Internet plans and launching a new low-cost mobile offering for low-income Canadians.

Any noncompliance could lead to financial damages of up to $200 million for Videotron and $1 billion for Rogers.

“Should parties fail to live up to any of their commitments, our government will use every means in our power to enforce the terms on behalf of Canadians,” ensured Minister Champagne.

Another commercial network-access agreement between Videotron and Rogers includes policies on a mobile virtual network operator (MVNO) and domestic roaming for expanded and cheaper wireless services for Canadians.

The industry minister said he looks forward to similar commercial MVNO agreements being signed “expeditiously” by the major players with regional ones across the nation.

“Under these conditions, Videotron’s acquisition of Freedom Mobile’s licences will improve affordability, competition, and innovation in the telecommunications sector.”

National Trending StaffNational Trending Staff

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