WhistleOut fast facts
- Rogers Communications has been working to acquire Shaw Communications since 2021. The deal would create the second-largest telecom company in Canada.
- The Big 3 telecom companies own 90% of the market and charge some of the highest wireless rates in the world.
- Rogers’s efforts at appeasing the Competition Bureau and the Minister of Innovation, Science and Industry are so far falling short.
- In an end-of-the-year twist, Bell acquired telecom company Distributel in December 2022.
In March of 2021, Rogers Communications announced a deal to buy Shaw Communications for $26 billion. Rogers is already a large telephone and internet company, and this deal would make it the second-biggest telecom company in Canada.
So what’s the issue with one company acquiring another? Acquisitions frequently happen in other industries, but this time, it came after the Liberal government ordered Shaw, Bell, and Telus to cut prices by 25% or face regulatory action. (Companies reached the commitment in January 2022; however, the Roger deal has not yet closed as of publication.)
Now, Rogers and Shaw have little overlap in operation areas for cable and internet — Shaw is in western Canada while Rogers is in eastern Canada — but their mobile businesses are competitors. Canadians already face high prices due to limited competition. The Big 3 companies own 90% of the market and charge more for the same service level found in countries like the United States and Australia. A report from Rewheel found that Canadians have the second-highest wireless gigabyte price in the world.
The acquisition of Shaw could raise prices again and limit plan options for consumers.
“We need more competition in Canada – not less,” Laura Tribe, executive director of OpenMedia, a community-driven organization focused on internet accessibility, said in a statement. “Over the years, we’ve seen competitor after competitor swallowed up by the Big 3. The result is always the same – more profits for the Big 3, worse plans and less choice for Canadians.”
In an effort to appease sceptics, Rogers has said it will sell its subsidiary, Freedom Mobile, to Vidéotron (a subsidiary of Quebecor). While the Freedom Mobile - Vidéotron and Rogers - Shaw acquisitions have since beaten the Competition Bureau’s opposition in court, the Minister of Innovation, Science and Industry has the final say.
The companies have extended the deadline for both deals to February 17.
And in a late end-of-year twist, Bell Communications quietly announced the completion of its acquisition of Distributel, a rival telecom company. The two companies announced the acquisition in September and noted that Distributel would continue to operate independently.
It’s unclear whether the deal faced the same regulatory scrutiny and when it gained approval.
Overall, these acquisitions can potentially harm telecom customers as they search for the best deal. While reduced competition is never good, we’ve combed through the data on all wireless carriers to find you the best deal.
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