The big telecom news of the week was on Monday when Rogers announced it would acquire Shaw in a $26 billion deal.
Reaction to the deal has been swift, with Canada’s Minister of Innovation, Science and Industry, François-Philippe Champagne, saying “This transaction will be reviewed by the independent Competition Bureau of Canada, the CRTC, as well as ISED and we won’t presuppose the outcomes of these processes.”
Consumer advocate OpenMedia said Canadians ‘cannot afford’ the Rogers-Shaw deal, as it would reduce competition and increase prices.
As for reaction from the federal New Democratic Party (NDP) leader Jagmeet Singh, he told the National Post in a statement the Rogers-Shaw deal would “only help big telecom companies profit more on the backs of Canadians.”
“Big telecom companies are gouging Canadians and continuing to make massive profits in a time where most families are struggling to get by. A merger between two of Canada’s biggest providers will just make it worse,” said Singh in a statement.
According to John Lawford, who leads the consumer advocacy group Public Interest Advocacy Centre, he told the Post the federal government is now “at the mercy of the telecom providers”, when it comes to quickly rolling out rural broadband connectivity. He believes telecoms have leverage over the government and now is a time to try for a merger.
The federal government would be better off investing into SpaceX and its Starlink internet for rural broadband connectivity, as early Canadian beta testers are seeing some impressive speeds versus incumbents.
Lawford also said the elimination of Shaw’s Freedom Mobile, which helped lower wireless data pricing, would also remove “downward pressure” on pricing from incumbents.
While Prime Minister Justin Trudeau has promised to lower wireless prices by 25%, the government says that will only apply to plans with lower amounts of data in the 2GB to 6GB range. So far, we are just getting periodic reports of tracking the prices of these smaller data plans, which doesn’t actually do much in terms of lowering prices.