Canada’s Commissioner of Competition filed papers to potentially block Rogers Communications' $16-billion purchase of Shaw Communications.
The bureau says the merger will lead to higher prices and fewer choices, particularly in the wireless sector.
About 87% of Canadian wireless subscribers are served by Rogers, Bell Canada and Telus. A particular concern of the Competition Bureau is that Shaw owns Freedom Mobile – a lower-priced competitor, which provides wireless services to more than two million customers in Ontario, Alberta and British Columbia. Freedom Mobile is Canada’s fourth largest mobile provider.
"Eliminating Shaw would remove a strong, independent competitor in Canada's wireless market — one that has driven down prices, made data more accessible and offered innovative services to its customers," Commissioner of Competition Matthew Boswell said.
However, according to analysts who spoke with CBC News in Canada, the government regulator is unlikely to kill the deal between Shaw and Rogers.
Rogers and Shaw first announced their deal in March 2021. While the deal is now facing an obstacle because of the combined company’s wireless holdings, the wireline component of the merger is more straight-forward. Shaw and Rogers both have cable and internet businesses, but they don’t have much overlapping territory.
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In response to the Competition Bureau’s objection, they put out a statement, saying they remain committed to the transaction. They said, “Rogers and Shaw are engaged in a process to sell Freedom Mobile, with a view to addressing concerns raised by the Commissioner of Competition.”
But they also said they will oppose the Competition Bureau’s application to prevent the transaction. And they will continue to seek approval of the transaction from the Ministry of Innovation, Science and Economic Development.
The companies argue their deal will benefit Canadians.
Rogers said it will invest $2.5 billion to build 5G networks across Western Canada over the next five years; establish a new $1 billion Rogers Rural and Indigenous Connectivity Fund dedicated to connecting rural and Indigenous communities across Western Canada; and spend another $3 billion on network and technology investments.