Tag: Roger-Shaw merger

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This week in Canadian telecom: Rogers-Shaw hearing [Nov. 5-11]

November 7th marked day one of the Competition Tribunal’s four (possibly five) week hearing into the Rogers-Shaw merger.

While dominating headlines, it wasn’t the only newsworthy story this week. As a recap, here’s almost everything that happened in Canada’s telecom sector.

Business

Starlink announced it would implement a data cap on residential plans. Customers will have 1TB of Priority Access during peak hours (7am to 11pm) per month. The company will move customers who go over to Basic Access, which offers slower speeds.

Telus is partnering with Énergir and Électrobac to provide Ukrainian refugees in Quebec with smartphones, wireless plans, and mental health consultations. The donation is valued at $218,000 and will support 300 families.

The first day of the hearing between Rogers, Shaw, and the Competition Bureau focused on the sale of Freedom Mobile. Lawyers from the bureau argued Freedom wouldn’t replace the competition Shaw brought. The opposing parties argued Freedom would work better under Vidéotron and serve as a more robust competitor than it was with Shaw.

Rogers also presented its third-quarter results for 2022. The company increased its revenue ($3.7 billion) and added thousands of new customers in the last quarter, despite its July outage that impacted wireless and wireline customers. Rogers paid $150 million in credits in response to the outage.

Government

Prime Minister Justin Trudeau added $475 billion to the Universal Broadband Fund (UBF). The fund pays for projects that expand high-speed internet access in rural communities across the country. The UBF has connected 900,000 homes so far, and the additional funds will help connect another 60,000.

The federal government and the Province of Alberta are working with Tsuut’ina Nation Telecommunications to connect 300 households in Tsuut’ina Nation with high-speed internet access. The two governments provided $2.6 million in funding.

Infrastructure

Rogers expanded 5G access to the Ontario communities of Maxville, Greenfield, Glen Robertson and Wendover. The expansion is in partnership with the Eastern Ontario Regional Network (EORN) and focuses on improving cellular access in rural eastern Ontario. Under the partnership, Rogers will build more than 300 new telecommunications towers and upgrade 300 existing towers by 2025.

Deals

Lucky Mobile is offering 10GB of bonus data on select plans. The bonus will apply for one year and is only available on new activations. More details are available here.

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Mobile Syrup

Competition Commissioner points to Freedom Mobile sale as example of anti-competitive action

The Commissioner of Competition’s recent response to Rogers’ $26 billion takeover of Shaw claims the two companies are selling the image of a competitive environment through the sale of Freedom Mobile while downgrading the competitive edge of Shaw Mobile.

The statements come through two updated responses, dated September 2nd and recently posted to the Competition Tribunal’s website.

As previously reported, the Commissioner has slated Rogers’ takeover of Shaw as anti-competitive. Referring to Rogers’ most recent filing on the merger, the bureau states Rogers “ignores” the harms the merger and its plans to sell Freedom Mobile to Vidéotron will have on the Canadian economy.

The sale of Freedom “fails to eliminate the substantial lessening and prevention of competition the proposed transaction will cause,” the Commissioner’s response states. Furthermore, the sale won’t replace the growing competition Shaw Mobile was delivering in Alberta and B.C., customers it gained at Rogers’ expense.

“The substantial growth in Freedom’s competitive significance under Shaw’s ownership amply demonstrate the significant benefits Freedom received from Shaw.”

The response also states Rogers erred in saying its takeover of Shaw would help compete against Bell and Telus. “Severing Freedom Mobile from Shaw’s wireline business will substantially compromise its ability to compete and provide much-needed competitive discipline to the national carriers.”

The response states the actions will “eliminate Shaw Mobile” while weakening Freedom Mobile, resulting in the “substantial lessening and prevention of competition.”

In its updated response to Shaw, the Commissioners’ application states Shaw downplayed its significance on the wireless market. “The launch of Shaw Mobile was profitable, having the intended effect of increasing overall profitability and reducing wireline customer churn.”

Source: Competition Tribunal 

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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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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