YOU ARE AT:5GCanada's competition commissioner to oppose Rogers-Shaw merger

Canada’s competition commissioner to oppose Rogers-Shaw merger

Rogers and Shaw said they remain committed to the proposed merger due to the long-term benefits it will bring for consumers and businesses

Canadian operators Rogers Communications and Shaw Communications said they were notifiied of the Commissioner of Competition’s intention to file applications to the Competition Tribunal opposing Rogers’ proposed merger with Shaw.

In a statement, the two companies said they remain committed to the proposed merger due to the long-term benefits it will bring for consumers, businesses and the Canadian economy. The companies have offered to address concerns regarding the possible impact of the transaction on Canada’s competitive wireless market by proposing the full divesture of Shaw’s wireless business, Freedom Mobile. Rogers and Shaw said they are engaged in a process to sell Freedom Mobile, with a view to addressing concerns raised by the Commissioner of Competition.

Rogers and Shaw also noted that they will oppose the application to prevent the transaction to be made by the Commissioner of Competition, while continuing to engage constructively with the Competition Bureau.

“The transaction will provide a combined Rogers and Shaw with the capabilities necessary to invest in digital infrastructure, create jobs, drive innovation, increase choice, and bridge the digital divide. In addition, the transaction will foster greater competition by creating Canada’s most robust wholly-owned national network, and generating more choice for businesses and consumers so they may realize the full economic and social benefits of next generation networks,” the statement reads.

The two companies also said that the transaction will result in a number of benefits including:

-Investing CAD2.5 billion ($1.93 billion) to build 5G networks across Western Canada over the next five years;

-Establishing a new CAD1 billion Rogers Rural and Indigenous Connectivity Fund dedicated to connecting rural, remote, and Indigenous communities across Western Canada;

-An additional CAD3 billion to support further network, services, and technology investments;

-Creating up to 3,000 net new jobs in Western Canada.

In order to permit continued engagement with the Competition Bureau, the two companies said they have agreed to extend the outside date of the transaction to July 31, 2022. In addition, Rogers and Shaw will continue to seek approval of the proposed merger from the Ministry of Innovation, Science and Economic Development.

The Canadian Radio-television and Telecommunications Commission said in March that it has approved Rogers’ planned acquisition of Shaw’s broadcasting services, subject to a series of conditions.

In March last year, Rogers Communications had announced that it will purchase Shaw Communications Inc. in a CAD20 billion deal.

The deal, which would result in a reduction of market competition, is still awaiting approval from the Canadian government. Currently, Canadian residents have four options for mobile operators — Rogers, Shaw, Telus Corp. and BCE Inc. — but if the deal is approved, Canadians will have one fewer provider to choose from.

ABOUT AUTHOR

Juan Pedro Tomás
Juan Pedro Tomás
Juan Pedro covers Global Carriers and Global Enterprise IoT. Prior to RCR, Juan Pedro worked for Business News Americas, covering telecoms and IT news in the Latin American markets. He also worked for Telecompaper as their Regional Editor for Latin America and Asia/Pacific. Juan Pedro has also contributed to Latin Trade magazine as the publication's correspondent in Argentina and with political risk consultancy firm Exclusive Analysis, writing reports and providing political and economic information from certain Latin American markets. He has a degree in International Relations and a master in Journalism and is married with two kids.