Freedom Mobile acquisition

Distributel was looking to acquire Shaw’s wireless assets in April, a publicly shared document at the Competition Tribunal’s hearing into the Rogers-Shaw merger show.

Distributel made two proposals, but Rogers never acknowledged the offers. Distributel made the offers before Bell announced it was acquiring the Ottawa-based telecommunications company.

The affidavit of Christopher Hickey, director of regulatory affairs at Distributel, says Bell’s acquisition wasn’t related to efforts to acquire Freedom Mobile from Shaw.

Another document shared with the public acknowledges the acquisitions of Ebox, which Bell announced it would take over, and VMedia, which Québecor acquired. The document calls the latter acquisition a “strategic” move, citing the Rogers-Shaw merger.

Rogers started meeting with prospective Freedom Mobile buyers earlier this year. As previously reported, the company was talking with multiple parties to secure a deal to satisfy competition concerns brought by Innovation Minister François-Philippe Champagne. The company agreed to sell Freedom to Québecor subsidiary Vidéotron for $2.85 billion. It’s not clear how much Distributel offered.

Distributel’s plans were revealed on day five of the hearing, which is in its second week. The day started with cross-examining representatives from Telus, which showed the company attempted to “kill, shape, and slow” the merger.

The details, marked initially to be confidential, were shared with the public after Chief Justice Paul Crampton said the parties needed to make efforts to be transparent. The first week of the merger saw the parties going behind closed doors on several occasions. Justice Crampton’s move to make things public suggests not everything discussed in-camera in week one needed to be that way.

Despite the transparency efforts, not all witnesses appeared before the public. Namely, Comcast, the American telecom company, had their session behind closed doors. The company argued they were only made aware of the need to be in a public session 20 minutes before they had to speak, and their prepared statement was made with complete confidentially in mind.

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Industry Minister Francois-Philippe Champagne has rejected the original merger proposition put forward by Rogers and Shaw.

“Today, I officially denied that request,” Champagne said Tuesday evening. “My decision formally closes that chapter of the original proposed transaction.”

But the merger is still open to be completed, granted Champagne’s conditions attached to the sale of Freedom Mobile are approved.

Champagne’s conditions include Videotron agreeing to keep wireless licenses it acquires from Freedom for 10 years. He also expects wireless bills to drop by 20 percent in Ontario and Western Canada, keeping in line with Quebec.

“A new service provider needs to be in it for the long run,” Champagne said.

A response released by Quebecor CEO Pierre Karl Péladeau signals the company is open to accepting Champagne’s conditions.

“We intend to accept the conditions stipulated by the Minister and incorporate them into the new version of the Rogers-Shaw/Quebecor-Freedom Mobile transaction, which has already been negotiated,” Péladeau’s statement read.

“They are in line with our business philosophy, which has proved highly successful in Quebec, where we have taken a significant market share in a very short span of time.”

However, critics are not in support of Champagne’s plans. OpenMedia says the Minister is backing telecom companies and failing Canadians. Speaking on the condition to lower wireless prices, OpenMedia says Champagne’s office hasn’t shared methods for how they will monitor and enforce the rule.

“Any version of the Rogers-Shaw deal means higher prices and fewer choices for ordinary consumers,” Matt Hatfield, OpenMedia’s campaigns director, said in a press release.

Champagne provides only one avenue of approval for the merger. The Canadian Radio-television and Telecommunications Commission (CRTC) approved the broadcasting part of the merger earlier this year. The third avenue of approval, through the Competition Bureau, will be examined later this week when the parties enter a scheduled meditation.

According to The Globe, the parties will discuss a settlement proposal from Rogers to see the company sell its fibre-optic infrastructure to Quebecor. Doing so will reportedly quash concerns the company doesn’t have enough infrastructure outside of Quebec to support the growth of Freedom Mobile.

However, the mediation may end with no resolution, as seen in the past. If that’s the case, the parties will enter a hearing with the Competition Tribunal early next month.

Source: The Canadian Press, Quebecor, OpenMedia, The Globe and Mail