Canada rejects part of Rogers, Shaw merger

Canada rejects part of Rogers, Shaw merger

Canada rejects part of Rogers, Shaw merger

Alamy Photo

Industry Minister Francois-Philippe Champagne on Oct. 25 formally rejected part of a deal between Canadian telecom giants Rogers and Shaw to merge, insisting on the need for competition in the wireless market.

The two companies announced the Can$26 billion (US$19 billion) tie-up in March, but faced pushback as it would arguably lead to less choice for consumers and higher cellphone bills.

“Earlier this year, I stated that I would under no circumstances permit the wholesale transfer of wireless spectrum licenses from Shaw to Rogers,” Champagne told a news conference.

“Today, I officially denied that request,” he said.

Anticipating the decision, Rogers had already proposed an alternative to address the concerns by selling Shaw’s Freedom Mobile subsidiary to Quebec-based Videotron.

That, too, would require Champagne’s approval and he laid out two conditions on Oct. 25: Videotron must keep the acquired wireless licenses for at least 10 years and offer prices now available in Quebec and 20 percent lower on average than the rest of Canada to subscribers nationwide.

According to the OECD, internet and mobile telephone services in Canada are among the most expensive in the industrialized world.