Feds Won’t Allow Rogers to Acquire Shaw’s Wireless Licences, Says Minister

The federal government says it will deny the wholesale transfer of Shaw Communications Inc.’s wireless licences to Rogers Communications Inc. (RCI) as part of the latter’s proposed $16 billion CAD acquisition of Shaw — reports CP24.

Industry Minister François-Philippe Champagne says he is concerned about the implications Rogers’ planned takeover of Calgary-based Shaw carries for competition in the wireless space.

Mr. Champagne says he will not allow the merger to go through with all of Shaw’s wireless business being transferred to RCI, as that would endanger wireless competition and probably jack up cellular prices for Canadians.

On Monday, a House of Commons committee tabled a report advising Mr. Champagne to deny the Rogers-Shaw merger if it includes Freedom Mobile.

With Ottawa denying the transfer of all of Shaw’s wireless licences to Rogers, it is likely that RCI will sell off some of the former’s wireless business in order to push the merger through.

“As Minister of Innovation, Science and Industry and the spectrum regulator, I am strongly committed to our policies to promote competition and ensure cell phone affordability for Canadians,” said Champagne in a press release on Thursday.

“The wholesale transfer of Shaw’s wireless licences to Rogers is fundamentally incompatible with our government’s policies for spectrum and mobile service competition, and I will simply not permit it,” he added.

Montreal-based Quebecor Media Inc. has already expressed interest in buying Freedom Mobile, even demonstrating that it can afford the acquisition. Freedom Mobile’s original founder is also willing to buy the telco back.

A joint statement from Rogers Communications Inc. and Shaw Communications Inc. issued on Thursday afternoon says, “We continue to work constructively with the government and regulators to close this transaction and deliver the benefits of the merger to all Canadians.”

“We share the government’s view that affordable, high-quality services should be available to every Canadian and by coming together, Rogers and Shaw will make the generational investments in networks and technology that Canada needs to create new jobs, increase competition, and bridge connectivity gaps in rural and remote areas. We continue to expect the transaction to close in the first half of 2022,” said the joint statement.

The Rogers-Shaw merger is pending approval from three regulators: the Competition Bureau, the Canadian Radio-television and Telecommunications Commission (CRTC), and Innovation, Science and Economic Development (ISED) Canada.

The CRTC is focused on evaluating the broadcasting side of the Rogers-Shaw merger, the Competition Bureau is looking at its possible impact on competition across relevant industries, and Innovation, Science and Economic Development Canada is reviewing the transfer of Shaw’s spectrum licences to Rogers.

Despite the setback, Rogers and Shaw still expect the deal to close sometime in the second quarter of this year.