After the Rogers-Shaw merger, some cellphone plans in Western Canada are not as cheap as before, claims Jeanne Pratt, the Competition Bureau’s Senior Deputy Commissioner of Mergers and Monopolistic Practices.
Pratt highlighted an increase in cellphone plan costs in Western Canada following the Rogers-Shaw merger, speaking to MPs on Monday.
She described Shaw as “a particularly growing and disruptive competitive force” in British Columbia and Alberta before its acquisition by Rogers last April. “They offered very aggressive pricing for bundled wireless plans,” Pratt noted, expressing concern over Rogers’ current pricing strategies, which she believes do not match Shaw Mobile’s pre-transaction offers, reports the Globe and Mail.
During her testimony at the House of Commons’ industry committee, which is examining the accessibility and affordability of wireless and broadband services in Canada, Pratt’s observations were part of a broader discussion that included insights from the Canadian Radio-television and Telecommunications Commission (CRTC) representatives.
Rogers responded to say its current offerings, both in Western Canada and nationally, are not priced higher than before the merger. The company mentioned its commitment to a five-year price freeze for the 500,000 Shaw Mobile customers it acquired.
The issue of rising cellphone costs was previously flagged by MPs in January, noting a $5 average increase for certain Rogers and Bell Canada customers (we first told you about the Rogers increases).
The Competition Bureau had opposed the $26-billion Rogers-Shaw deal, arguing it would lower competition and lead to higher costs, poorer service, and fewer options for consumers. However, the Federal Court of Appeal upheld the merger, agreeing with the Competition Tribunal that the deal would not significantly lessen competition.
Conservative MP Rick Perkins asked if the feared reduction in competition was behind the recent price hikes. Pratt reiterated her concerns about Shaw Mobile’s elimination, emphasizing its role in driving down prices and bundled product offerings in Western Canada. “Frankly, the evidence showed that Rogers was the biggest loser in that fight,” she stated.
According to Scott Hutton, CRTC’s Chief of Consumer, Research, and Communications, there was a 16% decline in telecom service prices in Canada over the last year according to Consumer Price Index data. “Clearly, we need to continue our work, and we will be closely monitoring cellphone service prices to ensure that the recent price increase announced in January does not become a trend,” said Hutton.
The industry committee plans to hear from executives of Rogers and Telus in the future, with NDP MP Brian Masse proposing a motion to compel the ‘Big 3’ CEOs to show up if they don’t accept the invitation.
