Will four become three or will the regulators call a halt?
Twelve months ago Canada’s Rogers Communications agreed to buy Shaw Communications in a transaction valued at CAD 26 billion, proclaiming the combination of the two networks would create the possibility of “unprecedented wireline and wireless broadband and network investments, innovation and growth in new telecommunications services, and greater choice for Canadian consumers and businesses.”
It seems not everyone agreed, and now Canadian Minister of Innovation, Science and Industry François-Philippe Champagne has stated that the the wholesale transfer of Shaw’s wireless licences to Rogers is fundamentally incompatible with the government’s policies for spectrum and mobile service competition – he is quoted as saying “I will simply not permit it,”
Three separate regulators are currently reviewing the deal and Champagne is not the only one who will be pleased if the deal does not go ahead. Smaller rival Quebecor, who announced their plans to launch a national cellphone network last November, said "The pending Competition Bureau of Canada decision on the Rogers-Shaw transaction could also be an opportunity to create the dynamics for real, sustainable competition, for the benefit of Canadians,”
Quebecor further pointed out that Bell, Rogers and Telus already control 90 percent of Canada’s mobile market and so believe the regulars should move for more competition in the market.
Rogers and Shaw on the other hand argue the deal is in the interests of Canadian’s with ongoing affordable wireless plans, initiatives to reach every Canadian where the combined company offers internet services, and plans create up to 3,000 net new jobs.
Canada’s Competition Bureau launched an investigation into the deal last September, whilst Rogers and Shaw have again stated that they believe the deal will close in the first half of 2022. If Rogers aren’t allowed to buy all of Shaw’s wireless business, it does not mean the deal cannot go ahead – but concessions will certainly have to be made.