Rogers adding Shaw assets in the west will make it a stronger competitor for Telus: former Telus CFO
Following Industry Minister François-Philippe Champagne’s approval of Rogers Communications Inc.’s takeover of Shaw Communications Inc., one former telecommunications executive said the deal enhances competition in Canada’s wireless industry.
Robert McFarlane, the former chief financial officer of Telus Corp. and current corporate governance director, said in an interview with BNN Bloomberg Friday the deal maintains the status quo in Canada, where four players populate the telecommunications industry.
Following the transaction, he said Videotron, the fourth player, will become larger and benefit from “economies of scale.” Champagne stated that the approval of the deal is based on the condition that Shaw sell Freedom Mobile to Quebecor’s Videotron.
“I think competition is being enhanced, it isn't being reduced. There is not a reduction in the number of wireless providers,” McFarlane said.
“Second point is while governments love to focus on pricing, wireless pricing has actually gone down the past two years, that's down not up despite inflation.”
According to a comparison of wireless prices in 2021 by Statistics Canada, prices across eight categories of wireless services decreased by 15 per cent on average when compared to 2020.
However, Canada’s wireless market continues to be ranked among the most expensive across 50 countries, according to a May 2022 report from Finland-based research firm Rewheel.
Keldon Bester, a think tank co-founder at the Canadian Anti-Monopoly Project, said in an interview with BNN Bloomberg Friday that the deal is indicative of weakness in the nation’s competition laws.
“Our laws still allow that merger to proceed so first things first, I think we need a stronger set of laws to deter these mergers in the first place and after that, we need a competition law that really takes that power seriously to ensure that consumers and other businesses aren't under the thumb of these dominant incumbents,” Bester said.
While the price of wireless services in Canada is important, so is the quality of service, according to McFarlane.
“What I think matters more to the country is innovation, its efficiency, its competitiveness. Not to say that pricing isn't important, it is,” he said.
Other regulatory conditions include that Rogers allocate $1 billion to enhance access to broadband internet and 5G mobile service in places it is not currently accessible. Additionally that Rogers put $2.5 billion toward improvements to its Western Canada 5G network.
“What I like about these conditions is it's essentially reinforced the business plans to ensure they deliver on their commitments, including notably to invest in 5G technology, which doesn't exist today in Freedom Mobile’s network,” McFarlane said.
Rogers and Shaw said in a statement that the companies expect the $20 billion deal to close by April 7.