The deadline to complete the biggest and most contentious merger in the history of Canadian telecom is nearing, and critics are pursuing their crusade against the deal.
Industry Minister François-Philippe Champagne has yet to give the final approval for the C$26 billion merger deal to proceed, but he said at an Industry and Technology committee meeting on Monday that he has “not made a decision yet”, adding he is not close to finalizing anything and that “there will be a decision in due course.”
The final decision on the merger was supposed to be rendered on Jan. 31, but when it did not materialize, Rogers and Shaw extended the deadline of the sale to Feb. 17. If no decision is reached before this deadline, Rogers says it risks heavy financial losses and lawsuits from investors and Shaw.
The telecom giant nonetheless reported a whopping 25 per cent jump in profits in its latest earnings call and forecasted more revenue growth, noting that its guidance will be reassessed once the transaction with Shaw is closed.
If the deal is allowed to proceed, Rogers would acquire Shaw, and Québecor’s Vidéotron subsidiary would acquire Shaw’s Freedom Mobile wireless business, which critics argue would reduce the number of competitors in the telecom industry from four to three and drive up prices for consumers.
Independent internet service provider TekSavvy and telco Globalive have been the most vocal in pummeling the deal, arguing mainly that the pre-conditional sale of Freedom to Vidéotron is based on unlawful wholesale agreements.
Speaking to CBC, TekSavvy’s vice president of regulatory and carrier affairs, Andy Kaplan-Myrth, said that the merger would allow Québecor to provide internet service across Canada through Freedom Mobile’s existing network, creating major difficulties for companies such as TekSavvy.
Globalive also recently stated that the deal struck between Rogers and Vidéotron will have a negative effect on its re-entry into the wireless market.
“In their haste to overcome the Competition Act, it appears Rogers has violated the Telecom Act. We are looking for the ‘highly favourable rates’ Rogers has offered Vidéotron to be made available to all competitors,” said Globalive founder Anthony Lacavera in a LinkedIn post.
New Democratic Party leader Jagmeet Singh also urged Champagne to reject the merger, saying that the deal “is expected to make our cell and internet bills more expensive.”
Meanwhile, Rogers and Québecor are reportedly discussing options to reduce how much Freedom Mobile customers are charged when they roam on the Rogers network.
The merging parties are hoping to win Champagne’s approval with this move, which came right as Innovation, Science And Economic Development Canada (ISED) finalized its policy direction to the CRTC, placing value on competition, affordability, consumer rights, and innovation.