The federal government says it will not approve the wholesale transfer of wireless spectrum licenses from Shaw to Rogers, threatening the proposed merger of the two telecommunications giants unless new conditions are met.
François-Philippe Champagne, minister of innovation and economic development, stated on Tuesday that the move, which he had already committed to earlier this year, was intended to foster competition in the field.
At a brief press conference, he assured reporters, “I will never waver in my resolve to foster competition and make wireless services more affordable for all Canadians.”
As part of its offer to pay $26 billion for Shaw, Rogers intended to sell the wireless spectrum licences held by Shaw’s Freedom Mobile to Quebecor’s Videotron. That deal was made to address concerns about competitiveness.
Champagne, however, stated that in order to prevent the “flipping” of these licences for financial gain, he will not sanction these deals unless he is given assurances that any spectrum licences obtained by Videotron will be held for at least 10 years.
He stated that a new service provider must be committed for the long haul.
The minister said that he anticipates wireless costs in Western Canada and Ontario to be pushed down to levels that are comparable to those of Quebec-based Videotron, which Champagne claimed are 20% less expensive than those in the rest of the nation.
Champagne stated that if those requirements are met, he would think about approving the proposed spectrum transfers.
Since they are already familiar with me and what I’m telling them is that those are my expectations, he said, “I hope (the leaders of Rogers and Shaw) are watching TV tonight. I think they better listen.”
Given that there are still legal actions going on over the planned merger, a Rogers representative declined to comment on the statement.
In November, Rogers and Shaw are anticipated to go before the Competition Tribunal to make their case for the acquisition.
The Competition Commissioner and Rogers and Shaw have set a mediation for later this week.
The transaction has been challenged by Canada’s competition watchdog on the grounds that it will significantly reduce competition and drive up phone prices.
The Canadian Radio-television and Telecommunications Commission (CRTC) has already conditionally approved the merger of the two companies’ broadcast services, leaving the wireless division as the final hurdle for the deal.
Following multiple moves, Rogers this month extended the proposed deal’s closing date to December 31, with the option to extend it to January 31, 2023.
This summer’s day-long Rogers cellular service outage, which had a significant negative impact on Canada’s economy and left millions of consumers without phone or internet service, added to the threat to the merger.
The Competition Tribunal later ruled the outage would be relevant to its consideration of the merger and will likely factor into this fall’s hearings.
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with records obtained from the Canadian Press.
Ottawa refuses to transfer Shaw Wireless’ spectrum, posing a threat to the merger with Rogers
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