Anthony Lacavera Urges Ottawa to Deny Freedom Mobile-Quebecor Deal

Anthony Lacavera, chairman of Globalive Capital and the original founder of Freedom Mobile, doesn’t think selling the wireless provider to Quebecor Inc. will result in the “robust competition that the Canadian wireless sector desperately needs” — reports the Financial Post.

Lacvaera urged Industry Minister François-Philippe Champagne and Competition Commissioner Matthew Boswell to block the sale in a letter sent last week.

On June 17, Rogers and Shaw Communications announced an agreement to sell Freedom Mobile to regional telecom operator Quebecor for $2.85 billion.

Rogers and Shaw hoped the deal would be enough to win regulatory approval for the former’s proposed $26 billion acquisition of the latter, but regulators are yet to respond.

The merger has been held up by the Competition Bureau and the Ministry of Innovation, Science and Economic Development (ISED) Canada over concerns it would decrease competition and increase prices in the wireless space.

The Competition Bureau has officially petitioned the competition tribunal to block the Rogers-Shaw merger. Last week, the two sides agreed to initiate negotiations over the conflict on July 4.

Lacavera has been trying to re-acquire Freedom Mobile ever since it became clear Rogers-Shaw would have to sell it. However, the two cable operators accepted Quebecor’s offer, which is $900 million less than Lacavera’s bid.

Scorned by the decision, Lacavera said when the deal was announced, “Rogers has shopped this deal to a succession of billionaire friends and friendly parties who won’t compete with them and are willing to sell Freedom back to them at any time.”

In his letter to Minister Champagne and the Competition Commissioner, Lacavera said the sale would “not remedy the anti-competitive aspects of the merger” since it would still leave Rogers with a big chunk of Shaw’s wireless assets.

If Freedom is sold to Quebecor, Rogers is expected to retain 450,000 subscribers of Shaw Mobile, which is not part of the deal, along with all related assets.

“Our March 11 offer made clear that we would willingly acquire more than just the Freedom Mobile business should the merger approval require it,” Lacavera wrote.

“This was an important element of our offer since, like you, we have always held the view that the divestiture of the Freedom Mobile alone was unlikely to adequately address the anti-competitive effects resulting from the merger.”

Lacavera also cast doubt over Quebecor’s ability to compete outside its home province of Quebec. He said he could pay more to acquire all of Shaw’s wireless assets and still offer lower prices to consumers than a regional telco like Quebecor on account of being a “pure play” wireless provider with no other services to look after.

“Even if Videotron were to acquire Shaw Mobile (in addition to Freedom), Videotron is incapable of providing the robust competition that the Canadian wireless sector desperately needs.”

The Freedom Mobile founder went on to note that he has years of experience competing and driving down wireless prices in Alberta, B.C., and Ontario under the Wind Mobile banner.

“We’re the only ones that have actually competed in Ontario, B.C. and Alberta and actually brought prices down, and we did it for eight years,” Lacavera said.

Lacavera established Wind Mobile back in 2008. He built the wireless upstart into Canada’s fourth-largest carrier before selling it off to Shaw, who renamed it Freedom Mobile, for $1.6 billion in 2016. “I voted against selling at the time. I feel pretty good about the government taking us seriously.”