Rogers has allegedly proposed Xplornet to purchase Freedom Mobile, in order to gain regulatory approval for its acquisition of Shaw Communications, reported the Globe and Mail.
Two anonymous sources told the Globe that Rogers agreed to allow Xplornet to purchase Freedom Mobile in a filing to the federal government. The regulators now must decide whether Xplornet, a wireless and internet provider that chiefly services Canada’s rural areas, is a fitting buyer.
The proposed C$26-billion merger between Rogers and Shaw is undergoing review by Innovation, Science and Economic Development Canada (ISED), Canadian Radio-Television and Telecommunication Commission (CRTC), and the Competition Bureau. Aside from Shaw’s broadband infrastructure and media assets, Freedom Mobile and its associated wireless licenses stand as the greatest regulatory roadblock for Rogers.
Of the three regulatory bodies, the CRTC was the first to approve the deal under revised investment obligations. The CRTC oversees the broadcasting component of the merger, a less contentious part of the whole. Once the deal completes, Rogers would acquire all of Shaw’s media assets, including its 80 per cent stake in Corus Entertainment.
To gain the nod from the other regulatory bodies, Rogers has been scouting for a potential buyer for Freedom Mobile, which predominantly provides mobile services in Ontario, Alberta and British Columbia.
François-Philippe Champagne, Minister of Innovation, Science and Industry, said in a statement in March that “the wholesale transfer of Shaw’s wireless licenses to Rogers is fundamentally incompatible with our government’s policies for spectrum and mobile service competition.”
Several offers have come forward, including one worth C$3.75 billion from Freedom Mobile’s (previously Wind Mobile) founder Anthony Lacavera, who operates the venture capital startup Globalive, and Quebecor, who owns Videotron and chiefly operates in the province of Quebec.
As of February 2022, Freedom Mobile had around 2 million subscribers across Canada, capturing six per cent of Canada’s carrier market share.
Xplornet, on the other hand, serves around 400,000 customers across Canada. It was acquired by New York-based investment firm Stonepeak Infrastructure Partners in February 2020 for US$2 billion.