The Competition Bureau says it is seeking to block what Rogers Communications Inc. is proposing. acquisition of Shaw Communications Inc. for $ 26 billion. Sean Kilpatrick / The Canadian Press
None of the proposed deals for the sale of SJR-BT Freedom Mobile to Shaw Communications Inc. is not enough to maintain competition in the wireless industry, says the Canadian Competition Authority.
Toronto-based telecommunications giant Rogers Communications Inc. RCI-BT is seeking to sell Freedom Mobile to Shaw, Canada’s fourth-largest wireless operator, to get approval from regulators for a proposed $ 26 billion takeover of Calgary-based Shaw.
However, Competition Commissioner Matthew Boswell opposes potential buyers Rodgers has put before regulators, saying in documents filed with the Competition Tribunal that they are unlikely to provide Freedom Mobile with the same level of financial, managerial or technical support. like Shaw.
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On Monday, the competition authority submitted a request to the tribunal to block the merger of the country’s two largest cable networks. The Competition Bureau said in support of the app that Shaw has already stopped competing for the mobile phone business since the merger deal.
The bureau is also seeking an order to prevent telecommunications companies from closing the deal until the request is heard.
The move by the competition authority is a serious obstacle to the absorption of cable cables, which would change the country’s telecommunications landscape. Rodgers and Shaw said they needed a larger scale to move quickly to deploy 5G wireless services and compete effectively with global streaming giants. The companies promised to oppose the bureau’s statement.
The Competition Bureau, meanwhile, says Shaw and Rodgers are close competitors in the wireless market and that the merger, even with the sale of Freedom to a new owner, would lead to higher mobile phone bills.
Details of Rodgers’ proposed sale of Freedom Mobile were edited in documents released on the Competition Tribunal’s website on Tuesday. Earlier, The Globe reported that Stonepeak Infrastructure Partners, a New York-based private equity fund owned by rural internet provider Xplornet Communications Inc., was among the potential buyers Rodgers introduced to regulators.
On Tuesday, The Globe reported that Rodgers also presented an offer to regulators from a consortium that includes First Nations British Columbia, LiUNA Pension Fund of Central and Eastern Canada, infrastructure investor Fengate Asset Management and the Aquilini family, which owns Vancouver Canucks.
Other suitors who have expressed interest in the carrier include Quebecor Inc., which owns Montreal-based telecom Videotron Ltd., and Freedom Mobile founder Anthony Lacavera.
The Competition Authority says Rodgers’ proposals suggest that Freedom will face “significantly greater obstacles” to expanding its network and deploying 5G than Shaw would own.
Separating Freedom Mobile from Shaw’s network infrastructure would reduce the operator’s ability to offer bundled services, the regulator said.
The carrier also dropped the latest federal tender for wireless terrestrial waves, putting it at a “disadvantage for future expansion,” the regulator said. If sold, “Freedom will require a significantly larger investment to successfully deploy a 5G network than the one required by Shaw in the absence of the merger,” Mr Boswell said.
However, BMO analyst Tim Casey noted that Shaw has gone on sale because he does not want to continue investing in his wireless business. “We believe that the outright rejection of this deal will not satisfy the government’s position on a four-player market,” Mr Casey wrote in a research note on Sunday.
Rodgers and Shaw said in a statement Monday that they remain committed to closing the deal and working to sell Freedom Mobile in its entirety.
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