Rogers Communications Inc.’s deal to acquire Shaw Communications Inc. would hurt consumers unless Shaw’s wireless carrier Freedom Mobile is excluded, Quebecor Inc.’s chief executive officer has told members of Parliament, hinting his company would be an interested buyer.
Pierre Karl Péladeau, president and CEO of Videotron Ltd. owner Quebecor, made his comments Wednesday to the standing committee on industry, science and technology, which has convened hearings on a deal that would see Rogers acquire Shaw for $26-billion, including debt.
Earlier this week, MPs grilled top executives from Toronto-based Rogers and Shaw of Calgary over what the proposed merger would mean for competition in Canada’s wireless industry, as it would reduce the number of wireless players to three from four in Ontario, Alberta and British Columbia. The deal requires the approval of the Competition Bureau, the Ministry of Innovation, Science and Economic Development and the Canadian Radio-television and Telecommunications Commission.
Mr. Péladeau urged Ottawa not to abandon its long-standing ambition to encourage a national fourth wireless carrier to emerge through policies such as setting aside spectrum – airwaves used to transmit wireless signals – for smaller players. Quebecor’s wireless carrier Videotron, as well as Atlantic Canadian operator Eastlink, owned by Bragg Communications Inc., have both benefited from those policies, leading to lower cellphone bills for consumers, Mr. Péladeau said.
“History shows that when you have four operators, you’ll be able to enjoy more competition and that will be shown in the prices and different offers that are available for consumers … less players, less competition,” Mr. Péladeau said.
He pointed to wireless prices in Quebec, where Videotron has a strong presence, being as much as 40 per cent lower than in other parts of the country.
Mr. Péladeau also hinted to the committee that he would be interested in acquiring Freedom Mobile if it were for sale.
“In 2008, we already approached certain operators to try and have a national presence,” Mr. Péladeau said.
“We certainly are the candidate with the expertise, the experience and the financial means when it comes to telecommunications and marketing that we would be able to meet the necessary criteria to be successful,” he added.
Mr. Péladeau also said that forcing the country’s three big telecoms – Rogers, BCE Inc.’s Bell Canada and Telus Corp. – to open up their networks to resellers, known in the industry as mobile virtual network operators, or MVNOs, would not solve Canada’s wireless competition challenges.
The CRTC is mulling such a policy, with a decision expected in the coming weeks. But MVNOs don’t have the means to compete with the Big Three telecoms, Mr. Péladeau said. “Since they are essentially resellers of capacity, they will never have the same impact on the market as providers with their own facilities.”
When asked on Monday whether Rogers would consider spinning out Shaw’s Freedom Mobile to appease regulators, Rogers CEO Joe Natale said he is “open and flexible” to resolving any potential competition issues but that it’s too soon to comment on specific regulatory remedies.
Chima Nkemdirim, vice-president of government relations at Shaw, said Monday that although the company is proud of what it has accomplished since acquiring Wind Mobile in 2016 and renaming it Freedom Mobile, the business is “still not free cashflow positive.”
Shaw has said that combining forces with Rogers would allow it to move more quickly on rolling out fifth-generation wireless technology, a process that is expected to cost Canadian telecoms a combined $25-billion over the next five years.
Meanwhile, TekSavvy Solutions Inc., an independent internet service provider, told MPs that the deal should not be approved unless other steps – such as mandating access for MVNOs and implementing lower wholesale broadband rates – are taken to promote competition.
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