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Rogers CEO Banking On Deep Pockets to Push Shaw Merger Through

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Rogers and Shaw Communications have come under heavy fire since the former proposed to acquire the latter for $26 billion CAD back in March, a deal Shaw shareholders have already signed off on.

The merger has been condemned as a ‘bad idea’ for competition in Canada’s telecommunications industry, which already happens to be a well-documented oligopoly, by everyone from members of government and smaller telecom operators to the Canadian public.

According to BNN Bloomberg, Natale has one simple strategy to push the Rogers-Shaw merger through all of that contention and make it a reality: spend billions of dollars.

Canada’s telecom industry will spend close to $26 billion CAD by 2025 to bring 5G connectivity to the country, said Natale in an interview. He added that, as the country’s largest provider, Rogers will not only invest billions in wireless spectrum licenses but also contribute a large chunk of that overall investment.

“That’s an incredible number,” said Natale, who has been at the helm of Rogers Communication for four years now. “I would challenge most industries in Canada to lay down a number that is that large, in terms of investing in the future prosperity of Canada.”

Canada is home to some of the highest wireless and internet prices in the world, to the point where high wireless costs and a lack of affordable internet have become a national political issue.

The Rogers-Shaw deal would have one of the three largest telecom providers in Canada absorb another, and competition in the industry will take a massive hit as a result. Analysts already expect cellular and internet prices across the country to go up, should the merger be approved.

Perhaps the biggest threat posed by the deal is the fact that it currently includes Shaw’s Freedom Mobile division, which directly compete with Canada’s Big Three telcos with lower-cost wireless plans in major cities, including Vancouver and Toronto. Freedom Mobile’s acquisition would thin down the competition even further.

“I can say every time I’ve been talking to telecom executives, I always remind them that affordability is what is on my mind,” said Minister of Innovation, Science, and Industry Francois-Philippe Champagne in an interview this week. “How do you achieve affordability? It’s through competition.”

The Rogers-Shaw deal will be subject to extensive examination by the Competition Bureau — Canada’s antitrust watchdog, and approval from the federal government.

Most experts believe that the merger won’t be approved without Canadian regulators making modifications to the terms, with the exclusion of Freedom Mobile from the merger being a no-brainer.

“We’re committed to getting the deal done and we’re committed to sitting down with the regulatory bodies to figure out what is the best path forward,” said Natale. “We believe this deal will get done.”

A decision regarding the takeover isn’t expected until sometime in the first half of 2022, with activists fighting to derail it for the sake of the Canadian people in the meantime.

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