Rogers and Shaw executives testified to Members of Parliament on Monday, in an attempt to explain how their $26 billion deal to merge would ultimately increase wireless competition for Canadians.
According to BNN Bloomberg, MPs grilled executives from both companies, asking them to justify how merging would lower prices and expand competition for consumers.
New Democrat Brian Masse doesn’t believe the merger will bring competition, questioning how the elimination of a wireless player will somehow increase competition.
“You promised increasing jobs, new investment, lower prices and to reach markets that you wouldn’t before — be it Aboriginal or rural (or) remote. I mean these are promises that would make a robber baron blush,” said Masse.
Conservative MP Pierre Poilievre and telecom critic, asked Shaw president Paul McAleese, “Do you believe a fourth carrier reduces prices?”, to which the former Freedom Mobile executive replied, “I believe a dynamic competitive environment reduces prices,” adding, “It’s all situational, Mr. Poilievre.”
McAleese explained to Bloc MP Sebastien Lemire, “It is not simply a matter of how many carriers are in the marketing, but in fact what they’re doing,” noting there is no “magic” number of carriers that creates competition.
Other MPs such as Liberal Nathaniel Erskine-Smith cast doubt on Shaw, given the company’s previous statements about the value of having strong regional wireless competitors against incumbents.
“In this deal, we lose that competition and disruption (and) we lose a pressure toward affordability,” Erskine-Smith told Shaw CEO Brad Shaw.
Update March 30: Erkine-Smith has added more context this morning on Twitter:
In a brief submitted to our committee on Jan 15, 2021, Shaw stated that “regional facilities-based competitors – Shaw, Videotron, and Eastlink – are rapidly disrupting the dominance of the Big 3 and driving unprecedented levels of affordability and choice for consumers."
— Nate Erskine-Smith (@beynate) March 30, 2021
They went on to say: "Freedom’s entry has shifted the market dynamics, causing the Big 3 to drastically reduce overage fees and offer significantly more data for much lower prices."
One would think that Freedom's exit would shift the market dynamics in the opposite direction.
— Nate Erskine-Smith (@beynate) March 30, 2021
But don't take it from me, here's the Competition Bureau:
"Where the Big 3 face a wireless disruptor, prices are significantly lower…Wireless disruptors offer the most promising path forward. They drive lower prices, greater choice and increased levels of innovation…"
— Nate Erskine-Smith (@beynate) March 30, 2021
Rogers and Shaw executives told MPs the merger of both companies would result in a faster 5G rollout and also the expansion of wireless and internet to rural and urban areas.
Shaw said it isn’t capable of spending billions on its own to build a competitive 5G network. Rogers said it needs to grow larger to compete against Bell and Telus.
“Every week, people are fighting hammer and tong for that next customer,” said Rogers CEO Joe Natale, adding he believes competition will increase with a merger.
“So the competitive intensity will not change. In fact, it will only get greater because of the capabilities of both the Shaw, and the Rogers organization,” he added.
The virtual hearing of the Industry, Science and Technology Committee took place Monday in Ottawa. More testimony is slated for Wednesday, with executives from other companies and consumer advocates to speak next.
Rogers said earlier this month it expects the deal to close by early 2022.
