Industry Minister Francois-Philippe Champagne said on Tuesday that the federal government had formally rejected a request to allow Rogers wholesale access to Shaw’s wireless frequencies, but he also outlined the terms of a revised proposal.
Federal approval is one of the hurdles Rogers Communications Inc.’s proposed $26 billion merger with Shaw Communications Inc. must overcome.
The original proposal would have seen Rogers acquire Freedom Mobile from Shaw. But the Competition Bureau said in May that the acquisition would eliminate “an established, independent, low-cost competitor” and also prevent existing competition in wireless services in Ontario, Alberta and British Columbia, where Freedom currently operates.
Champagne announced that he had officially rejected that proposal on Tuesday.
“My only concern is to offer better prices to Canadians,” he told a press conference.
In an effort to allay those concerns, the two companies finalized an agreement to sell Freedom Mobile to Videotron, a unit of Quebecor Inc., in August.
Champange said that in order for him to approve the merger under this agreement, he needs a commitment from Videotron to maintain the wireless licenses acquired from Shaw for at least 10 years.
The minister also said he wanted to see the company offer customers in Ontario, Alberta and British Columbia wireless rates comparable to those it currently offers in Quebec, which he said , are on average 20% lower.
“I think they better consider what I’m going to watch and those two things are going to be fundamental,” Champagne said at the press conference.
The revised merger agreement will have to be submitted to the Competition Bureau before being resubmitted to the Minister of Industry.
Quebecor CEO Pierre Karl Péladeau said Tuesday evening that his company would comply with the two stipulations set out by Champage. He said the company is committed to challenging Rogers, Bell and Telus, which have a large share of the wireless market in Canada.
“We will work to offer better prices to Canadians in other provinces and to end the reign of the ‘Big 3’ by promoting competition,” Péladeau said in a press release.
The Canadian Radio-television and Telecommunications Commission approved Rogers Communications Inc.’s acquisition of broadcasting services from Shaw Communications Inc. in March.
CBC has contacted Rogers for a statement, but the company said it would not comment at this time.
Last week, NDP Leader Jagmeet Singh wrote to Prime Minister Justin Trudeau asking the government to outright reject the Rogers-Shaw merger, even if it is cleared by the Competition Bureau.
“If Rogers and Shaw are successful, it will only be because the Competition Act is weak and because your government has failed to step up and act to make life more affordable for ordinary Canadians,” he said. writes Singh.
“Stopping this merger is the only outcome that protects Canadians.”