BCE Inc.’s chief financial officer says that if Rogers Communications Inc. agrees to sell Shaw Communications Inc.’s Freedom Mobile in a proposed $26-billion takeover, the wireless unit will have a difficult time competing against national, integrated telecoms.
Glen LeBlanc said he thinks there’s a “high probability” that Rogers will have to sell Shaw’s wireless business to gain regulatory approval of the proposed merger, which would otherwise eliminate Canada’s fourth-largest wireless carrier.
However, Mr. LeBlanc said he believes that without Shaw’s support, Freedom Mobile will be less effective at competing against integrated telecoms who are able to win customers by bundling multiple services together.
“I think that a new fourth player will be weaker than what Shaw has been. It will be a wireless-only player and likely have a weaker balance sheet, competing against national integrated players,” Mr. LeBlanc said Tuesday during Scotiabank’s telecom, media and technology conference.
Mr. LeBlanc’s comments come after Innovation, Science and Industry Minister François-Philippe Champagne said last week that he won’t allow Rogers to acquire all of Shaw’s wireless licences because doing so would be at odds with Ottawa’s desire to encourage competition in the industry.
Quebecor Inc. has publicly expressed interest in buying Freedom Mobile, which operates in Ontario, Alberta and B.C.
Mr. LeBlanc said that although Quebecor’s Videotron Ltd. has done “extraordinarily well” in its home market of Quebec, competing out west where it has no cable network “will be very different” and could serve as a distraction.
“It’s going to take their attention away from their core market in Quebec,” Mr. LeBlanc said, adding, “I think we actually have an opportunity here.”
The takeover, which would combine two of the country’s largest cable networks, requires approval from three federal bodies – the Competition Bureau, the Canadian Radio-television and Telecommunications Commission (CRTC) and the Ministry of Innovation, Science and Economic Development. Rogers has said it expects the deal to close by the end of June.
On Friday, a House of Commons report recommended against the takeover and urged the federal government to prioritize affordability as it reviews the deal.
Doug French, chief financial officer of Telus Corp., said regulators reviewing the deal will have to weigh what approving the takeover will mean for consolidation in the industry. “If this one is allowed, are others going to be allowed?” Mr. French said told investors during the Scotiabank conference.
Vancouver-based Telus responded to the news of the proposed merger by speeding up its planned network investments, Mr. French added. “When you have [a larger] fibre footprint, more 5G, obviously that’s going to allow you to continue to have … the best networks to compete, irrespective of who your competitor is,” he said.