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Rogers-Shaw Merger Has ‘Serious Issues’ Related to Competition, Says Minister

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Canada’s Innovation Minister, Francois-Philippe Champagne, spoke about the $26 billion Rogers-Shaw merger with BNN Bloomberg on Tuesday.

“Affordability, competition and innovation are key when it comes to the telecoms sector,” said Champagne, seemingly echoing talking points from the federal government.

“Obviously that proposed transaction will be reviewed with these lenses to make sure that Canadians will have access to affordable and competitive prices when it comes to telecoms, and that we also foster innovation in that sector,” said Champagne on a video call.

He told BNN Bloomberg, the deal has “very serious issues and very important issues when it comes to maintaining that level of competition.”

The merger, if approved, would lower the number of wireless carriers from 4 to 3 in roughly two-thirds of Canada, as Shaw’s Freedom Mobile would join Rogers.

The minister added, “new entrants have demonstrated time and time again that they can create that level of competition in a country as big as Canada,” noting, “history has demonstrated that they have played a key role in trying to bring prices down and in bringing more competition to the sector in Canada.”

With the Rogers plan to acquire Shaw not yet approved—will the latter be allowed to bid on 3,500 MHz wireless spectrum airwaves for 5G in June?

That is “under active review”, said Champagne. “That’s something we’re reviewing as the rules are being prepared with respect to that particular auction,” he said to BNN Bloomberg.

The minister also said he also reminds telcos about the government’s plan to lower wireless prices for 2GB to 6GB plans by 25%, whenever he talks to them.

Consumer advocates argue the Rogers-Shaw deal would lower competition and increase prices. But when Rogers and Shaw executives testified to Members of Parliament earlier this week on the matter, they boldly said the opposite would occur.

“Every week, people are fighting hammer and tong for that next customer,” said Rogers CEO Joe Natale, adding, “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.”

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