It's going to be a 'massacre': Anthony Lacavera on $20B Rogers-Shaw deal
The founder of the wireless company now known as Freedom Mobile says the $20-billion Rogers-Shaw sale is a costly move that will likely lead to high prices for wireless customers and layoffs for telecom staff.
Anthony Lacavera, founder and chairman of Globalive, made the comments to BNN Bloomberg on Friday, after the federal government gave final approval to Rogers Communications Inc.’ proposed purchase of Shaw Communications Inc.
Lacavera predicted that layoffs will be the only way Rogers can finance the costly takeover.
“I know the business, and I know that the only way Rogers is going to finance this very expensive cable merger is we're going to see layoffs, as a nice way to put it. It's going to be a massacre,” Lacavera said in a television interview.
Rogers said it completed the sale on Monday.
As a condition of the sale’s federal approval, Rogers must create 3,000 jobs in Western Canada and maintain them for at least 10 years.
Shaw subsidiary Freedom Mobile, which was originally called Wind Mobile, was sold to Quebecor’s Videotron as another key condition of Industry Minister François-Philippe Champagne’s approval of the sale, in an attempt to introduce a fourth wireless player in the Canadian market and improve competitiveness in the sector.
Lacavera said he does not expect Freedom Mobile to successfully compete, or bring down wireless prices at its competitors, because it is not independently owned.
He predicted that the cable and phone companies that own Canada’s wireless carriers will want to “defend their legacy business” and maintain high prices, and said the Rogers-Shaw approval has allowed that structure to continue.
“We’ve done nothing to solve the structural problem in Canada. In fact, we’ve gone in the other direction and allowed more consolidation to happen,” he said.
Lacavera also predicted that the conditions on the sale and associated financial penalties would be difficult to enforce.
BNNBloomberg.ca has reached out to Rogers for comment.