Tag: Competition Bureau

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Analyst believes Rogers’ takeover of Shaw will push into 2023

Maher Yaghi, an analyst at Bank of Nova Scotia, believes the Rogers and Shaw merger will drag well into 2023.

According to reporting from the Globe and Mail, the Competition Bureau’s pushback against the merger is one reason for Yaghi’s reasoning.

“The odds are increasing that it will take a full trial, and possibly a further appeal, before we get a clear view on the outcome of that transaction,” Yaghi said.

The Commissioner for Competition filed to block the merger in May, stating the transaction would decrease competition and is not a good deal for Canadians.

To appease the issue of competition, Rogers said it would sell Freedom Mobile to Vidéotron to create a fourth competitor in the wireless market. However, the Commissioner of Competition said the sale wouldn’t dispel concerns. 

“The Competition Bureau continues to argue that a fourth national wireless service provider needs to have strong economics to sell wireless and wireline bundled services, and not just wireless, to remain viable,” Yaghi said.

On Monday, the Competition Tribunal delivered another blow to Rogers, ruling the July 8th service outage is applicable to the hearing. Rogers previously stated the outage was not connected to the $26-billion Shaw takeover.

According to the Competition Tribunal’s website, the first week of a five-week hearing will begin on November 7th. The last day of the hearing is December 8th. Oral arguments will push the matter well into December 14th.

Source: Globe and Mail 

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Questions relating to Rogers’ July 8th outage applicable to Shaw merger hearings

The Competition Tribunal has ruled the July 8th Rogers outage will be relevant to proceedings on Rogers’ overtaking of Shaw.

The tribunal made the ruling Friday after they heard from the Commissioner of Competition and representatives from Rogers.

The outage impacted 13 million wireline and wireless customers. However, it’s important to know the final figure of impacted users is much higher than 13 million, as the outage impacted carriers and various companies who use Rogers services.

Rogers is vying to buy out Shaw in a $26-billion merger but has only received approval from the Canadian Radio-television and Telecommunications Commission (CRTC) so far. Innovation, Science and Economic Development Canada (ISED) has yet to make a decision, and the Competition Bureau has opposed the merger, stating it’s not in the best interest of Canadians.

To address concerns, Rogers said it will sell Freedom Mobile, Shaw’s wireless asset, to Vidéotron to create more competition. While the sale is contingent on the approval of Rogers’ takeover of Shaw, the Commissioner says the sale is “not an effective remedy.”

“It fails to eliminate the substantial lessening and prevention of competition the proposed transaction will cause,” the Commissioner states in an amended response posted on August 15th. 

Source: Competition Tribunal 

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TekSavvy wants Competition Bureau to enforce predatory internet pricing in Canada

Aerial view of mobile phone cell tower to illustrate lack of broadband internet service in rural areas and need for investment

TekSavvy says the Competition Bureau is not enforcing anti-competitive behaviour under the Competition Act, forcing Internet Service Providers (ISPs) to go out of business.

In a letter addressed to the Canadian regulator, TekSavvy says the Bureau has taken no action to address the anti-competitive activities it detailed in a February 2020 complaint.

That complaint says incumbents took part in “predatory pricing” of retail internet services through their flanker brands. Citing Virgin (Bell’s flanker brand), Fido (Rogers’ flanker brand), and Fizz (Vidéotron’s flanker brand), TekSavvy says these flanker brands offer retail internet prices that cost less than the “inflated” wholesale price incumbents charge competitors.

“The Bureau has taken no action to address the anti-competitive activities detailed in our complaint and has remained silent as incumbents acquire independent competitors and while prices continually rise for consumers. This trend can only be expected to worsen if the Bureau does not take enforcement action,” the letter reads.

TekSavvy warned such practice would lead wholesale-based competitions to exit the market, a reality it says has come true. In its recent letter, TekSavvy highlights Bell’s acquisition of EBOX and Québecor’s takeover of VMedia.

“By acquiring independent companies and continuing to operate them under their established brands, incumbents get to both eliminate their competitors and benefit from the goodwill they have built as independent alternatives,” the letter says.

Such actions are leading to higher prices for consumers. According to the Wall Report, which compared internet services. The most popular internet services saw a 13 percent price hike between 2020 and 2021.

TekSavvy says the price hike isn’t related to global market forces. The Wall Report details broadband costs have decreased in other countries covered in the report, except for Canada and Japan.

“Canada is suffering through a cost-of-living crisis. Consumers should not continue to pay increasing, artificially inflated prices for an essential service while heavily subsidized, large incumbent carriers reap record profits,” TekSavvy says.

Image credit: Shutterstock 

Source: TekSavvy

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Mediation between Rogers, Shaw and Competition Bureau fails

Efforts to mediate the Commissioner of Competition’s concerns on Rogers’ takeover of Shaw have failed.

The mediation took place behind closed doors on July 4th and 5th. The commissioner will present his application to the Competition Tribunal later this year.

The commissioner filed to block the merger in May, stating it would decrease competition in the wireless market and increase costs for Canadians.

“We are taking action to block this merger to preserve competition and choice for an essential service that Canadians expect to be affordable and high quality,” Matthew Boswell, the Commissioner of Competition, said at the time.

Both Rogers and Shaw filed statements stating Boswell’s analysis was incorrect. In a joint statement, the companies say they will continue to work with the commissioner “to highlight the many benefits of the merger.”

Image credit: Shutterstock

Source: Rogers

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Alberta’s Attorney General will intervene in tribunal’s review of Rogers-Shaw deal

The Province of Alberta will intervene in proceedings between Rogers, Shaw, and the Competition Bureau, according to a notice filed by Alberta’s Attorney General on Monday.

First reported by Reuters, the notice says Rogers and Shaw have a “significant presence” in the province’s state of telecommunications, and “their successes and failures will impact Alberta’s consumers, workers, and, potentially, other aspects of Alberta’s economy.”

Shaw is based in Calgary and Rogers in Toronto. The notice says the Attorney General doesn’t take a specific position at this time given the “limited material filed with the tribunal” but has the right to do so after proceedings begin.

The Commissioner of Competition filed an application to block Rogers’ $26 billion takeover of Shaw in May. The three parties are taking part in a mediation process behind closed doors. If they fail to reach a conclusion, the commissioner’s application will go before the tribunal before the year’s end. 

Source: Competition Tribunal 

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Competition Bureau, Rogers and Shaw to participate in tribunal mediation

Rogers, Shaw, and the Competition Bureau have agreed to take part in a mediation process over the two companies’ $26-billion merger.

The tribunal told Reuters the mediation will take place on July 4th and 5th and will be confidential.

The Commissioner of Competition filed an application to block the merger in May, stating the move would decrease competition and lead to pricier wireless services.

The bureau also said the sale of Shaw’s wireless business, Freedom Mobile, to create a fourth competitor in the wireless market won’t be enough to address competition concerns.

Rogers announced it would sell Freedom Mobile to Québecor Inc. for $2.85-billion, but the deal won’t be finalized until it receives regulatory approval.

Both Shaw and Rogers filed responses asking the tribunal to dismiss the commissioner’s application. Shaw’s response stated that the commissioner’s application is based on “fundamental misconceptions” about its business. Rogers called the bureau’s rejection of the sale of Freedom Mobile “unreasonable” and “not supportable at law.”

Source: Reuters

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Shaw says Competition Bureau’s opposition of Rogers merger based on ‘fundamental misconceptions’

Rogers and Shaw are asking the Competition Tribunal to dismiss the Commissioner of Competition’s order blocking their proposed $26 billion merger.

The Commissioner filed an application to the Competition Tribunal last month, saying the merger would impact wireless competition in Canada. The application further states Shaw owned Freedom Mobile’s ability to compete in the wireless market depends on how Shaw leverages its wireless assets.

In separate responses to the Competition Tribunal, both Rogers and Shaw disagreed.

Shaw’s response

Shaw says the Commissioner of Competition’s application to block its overtaking by Rogers is based on “fundamental misconceptions” about its business.

In its response, Shaw says the commissioner wants to block the merger because he believes it will lessen wireless competition in parts of Alberta, British Columbia, and Ontario, but “there is simply no basis for this extraordinary measure.”

Shaw says the commissioner’s concerns about the inseparability of its wireless and wireless business are “wholly misplaced.” The company says it purposely designed Freedom Mobile to be a standalone business and ensure “it can cleanly and easily be separated from Shaw.”

“Contrary to the Commissioner’s allegations, Freedom Mobile’s success under Shaw’s ownership has not depended on “leveraging” Shaw’s wireline assets.”

Rogers response

Rogers says the acquisition won’t decrease competition but will lead to “substantial efficiencies for the Canadian economy.”

The Toronto-based company said the commissioner’s rejection to sell Freedom Mobile is “unreasonable” and “not supportable at law.”

Rogers says the divestiture of Freedom as a fourth competition in the wireless market will eliminate any alleged concerns the merger would have on competitive effects.

The responses were filed less than a week after Rogers agreed it wouldn’t close the merger until it reached an agreement with the Competition Bureau. 

Both companies are asking the tribunal to dismiss the commissioner’s application.

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Rogers agrees not to close Shaw merger until agreement with Competition Bureau finalized

The Competition Bureau’s application seeking an interim injunction on the Rogers-Shaw merger has been resolved.

According to a press release from Rogers, the two companies won’t continue with the merger’s closing until they reach a settlement with the Commissioner of Competition or the Competition Tribunal has made a ruling.

If the matter goes before the tribunal, the two companies will oppose the commissioner’s application.

Matthew Boswell, the Commissioner of Competition, filed an application earlier this month blocking the merger. He argues the merger has reduced competition in the wireless market and, if approved, would result in higher bills for Canadians.

“I’m pleased this case can now move quickly towards a hearing before the tribunal. Our objective remains to protect Canadians by preserving competition and choice in Canada’s wireless market,” Boswell said.

Rogers has committed to selling Shaw’s wireless business, Freedom Mobile, to create a fourth competitor in the market. The company has been in talks with several organizations, including Xplornet.

Source: Rogers and the Competition Bureau of Canada 

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Telecom executives address Freedom Mobile sale at annual TD conference

Canada’s telecom executives all shared their take on creating a fourth provider in Canada through Freedom Mobile at the TD Securities Telecom and Media Conference Wednesday.

The wireless provider, currently under Shaw’s ownership, is a significant aspect of the merger as Rogers looks to sell the company to gain regulatory approval.

Numerous parties are reportedly on the table, including telecom providers Québecor and Xplornet. Globalive, which created Wind Mobile before it was sold to Shaw and renamed Freedom Mobile, is also a bidder.

Globalive recently entered a network partnership agreement with Telus to strengthen its bid. Telus’ chief financial officer Doug French said very little about the partnership at the conference, according to Cartt.ca.

“If there’s going to be a remediation partner in this, if this deal gets approved and if there was a network share [agreement] that needs to be signed, we would consider it as a Switzerland-type of approach to whomever,” French said.

“But we have to work through that and decide, as long as the terms were right, but MVNO is going to happen anyway. We just have to make sure we have potentially a more commercial outcome, instead of a government-regulated outcome.”

While the merger gained approval from the Canadian Radio-television and Telecommunications Commission (CRTC) on the broadcast aspect of the merger, federal bodies haven’t given green lights for internet and wireless services.

The Competition Bureau recently filed applications blocking the merger, saying it will decrease competition in Canada.

At the conference, Rogers CEO Tony Staffieri says the company has the opportunity to work with the bureau, according to Cartt.ca.

“…We have a good roster, if I can call it that, of qualified bidders that we think are ultimately going to hit the mark in terms of what’s required from a remedy standpoint.”

Source: Cartt.ca

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Every way the sale of Freedom Mobile could play out

Rogers’ merger with Shaw Communications has dominated headlines for the better part of the last year as it slowly inches towards completion.

The $26 billion acquisition is arguably one of the largest mergers of its kind, and it will change the way the wireless market operates, a cause of contention for many.

With Canadians paying some of the highest mobile bills globally, many worry the merger could further impact their bills. The concern is also playing on the minds of federal regulators. The Competition Bureau, one of the federal bodies that must approve the merger, has filed applications to block Rogers’ acquisition of Shaw. 

“We are taking action to block this merger to preserve competition and choice for an essential service that Canadians expect to be affordable and high quality,” Matthew Boswell, the Commissioner of Competition, said.

The Bureau worries removing Shaw as its own entity will reduce competition in an already concentrated wireless market. The Bureau found competition between Rogers and Shaw has declined and will continue if the merger is approved. They said Shaw’s wireless offering is already an established competitor and eliminating it will lessen competition within and outside Shaw’s service area.

Rogers is selling Freedom Mobile to appease federal bodies. (Image credit: Shutterstock)

According to Reuters, the Bureau’s decision to block the merger doesn’t mean they can’t reach a conclusion with Rogers.  “The commencement of litigation does not prevent the parties and the Bureau from reaching an agreement to remedy the competition concerns at any time,” a spokesperson told the publication.

Rogers is looking to sell Freedom Mobile to appease competition concerns. But the real game is to find a carrier that can make Freedom Mobile a fourth competitor, and there are many ways this can go.

Xplornet

Xplornet Communications appeared to be the first company Rogers took an interest in. In April, the Globe and Mail reported that Rogers presented a deal to the federal government to see the rural internet service provider, owned by New York-based Stonepeak Infrastructure Partners, buy Freedom Mobile. 

“Anthony Lacavera expressed interest in buying Freedom Mobile before Rogers said it would sell the asset.”

Executives from Xplornet and Rogers have remained quiet on the potential offer. During Rogers’ 2022 Q1 conference call, CEO Tony Staffieri said, “we’re not going to comment on any rumours that are out there.”

Stonepeak acquired Xplornet in June 2020.

Globalive

Globalive’s founder, Anthony Lacavera, expressed interest in buying Freedom Mobile before Rogers said it would sell the asset. Lacavera started Wind Mobile in 2008 before selling it to Shaw in 2015. The company was renamed Freedom Mobile in 2016.

Globalive’s offer is worth $3.75 billion, and according to the Globe and Mail, Twin Point Capital and Baupost Group are assisting with financing for the project.

Lacavera has made it increasingly clear that he wants to acquire Freedom Mobile. He told MobileSyrup the company successfully competed “head to head” with competitors when Globalive headed the company, and they’ll do it again if they acquire Freedom Mobile.

Lacavera said regulatory issues contributed to the sale of the company to Shaw. At the time, investors he brought in faced regulatory approvals to continue operating in Canada. Lacavera told MobileSyrup that his current investor group is primarily U.S.-based.

The company could run into similar regulatory issues despite careful measures, repeating its past. While any of the investors in the company’s making offers could face regulatory problems down the road, Globalive has already lived through this and showed that it could not hold onto the company.

MobileSyrup interviewed Anthony Lacavera in 2014.

Québecor

Québecor Inc. is also in talks to acquire Freedom Mobile despite being discluded from previous decisions. The parent company of Vidéotron owns 294 blocks of spectrum in the 3500MHz band across Canada, which is seen as a positive when it comes to expanding wireless services.

While Québecor Inc. has expressed interest in acquiring Freedom Mobile, it has also said it alternatively could choose to instead expand its business elsewhere. 

“Making comments on this specific situation is certainly not in our best interest,” Pierre Karl Péladeau, Québecor’s CEO, said on its involvement with Freedom Mobile during a conference call discussing the company’s first-quarter financial results.

A new offer

As reported by the Globe and Mail, the latest group of buyers is made up of the LiUNA Pension Fund of Central and Eastern Canada, the Musqueam Capital Corp, the Tsleil-Waututh Nation, Fengate Asset Management, and Aquilini Equities. The publication report’s the company’s have collectively presented the federal government with an offer to acquire Freedom Mobile.