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Minister underlines conditions on Rogers-Shaw, Videotron-Freedom transactions

26 Oct 2022

Francois-Philippe Champagne, Canadian Minister of Innovation, Science & Industry, yesterday (25 October 2022) issued a statement reiterating and clarifying his position on the proposed Rogers-Shaw merger and the related deal to sell Shaw’s Freedom Mobile subsidiary to Quebecor’s telecoms division Videotron. Ahead of a new round of mediation between Rogers, Shaw and Canada’s Competition Commissioner due to start later this week, the Minister underlined that, as previously stated, the government will ‘under no circumstances’ permit the ‘wholesale transfer’ of Shaw’s mobile spectrum licences to Rogers, declaring that: ‘Today, I officially denied that request, which had been pending before me. My decision formally closes that chapter of the original proposed transaction.’

Regarding Shaw’s related proposal to offload its mobile division to Videotron – requiring Innovation, Science and Economic Development Canada (ISED) approval for the associated spectrum licence transferals – Mr Champagne stated the following conditions would apply, in the interests of promoting competition and bringing down end-user prices: ‘First, I am giving notice that any new wireless licences acquired by Videotron would need to remain in its possession for at least ten years … Second, I would expect to see prices for wireless [mobile] services in Ontario and Western Canada comparable to what Videotron is currently offering in Quebec, which are today on average 20% lower than in the rest of Canada.’

Rogers and Shaw are preparing for a second round of mediation with a settlement proposal aimed at resolving the Competition Bureau’s opposition to their merger, including anti-competition concerns over the Videotron-Freedom deal, but if this process fails the parties will begin a Competition Tribunal hearing on 7 November, with an outcome expected before year-end. As previously reported by TeleGeography’s CommsUpdate, Rogers has made financial provisions to take the merger completion deadline into 2023.

For its part, Quebecor’s President/CEO Pierre Karl Peladeau stated yesterday that Videotron will accept the Minister’s conditions, which he said fitted with the group’s commercial strategy.

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