Rogers Communications and Shaw Communications said they still haven’t come to an agreement with the Canadian government about their proposed merger.
The companies issued a statement Wednesday saying the early mediation with the Commissioner of Competition Matthew Boswell on July 4 and 5 failed to come up with a resolution.
“Rogers and Shaw intend to continue to work constructively with the Commissioner to highlight the many benefits of the merger to all Canadians, including maintaining a strong and sustainable fourth wireless carrier across Canada through the proposed divestiture of Freedom Wireless to Quebecor Inc.,” the companies said.
The government is concerned that the proposed $26 billion deal will lead to less competition for wireless and cable services. Some analysts thought Rogers’ decision to sell Shaw’s Freedom Mobile assets to Quebecor would have addressed the Competition Bureau’s concerns, the Financial Post reported.
The next chance for mediation is set for October, although that doesn’t mean that Rogers and Shaw can’t find a resolution before then, the publication noted.
Last month, Rogers and Shaw said they strongly believed the sale of Freedom Mobile to Quebecor would ensure the presence of a strong and sustainable fourth wireless carrier in Canada and would address the government’s concerns.
But the founder of Freedom Mobile, Anthony Lacavera, called on Ottawa to reject the sale of Freedom Mobile to Quebecor, which he described as an anticompetitive move on the part of Rogers. Lacavera said Rogers rejected an offer from his firm, Globalive Capital, that would have resulted in Rogers getting $900 million more than Quebecor is paying.
“Despite offering more than $900 million more than Vidéotron (a subsidiary of Quebecor Inc.), Globalive was blocked from the process without legitimate reason because Rogers is evidently looking to ensure that the oligopoly status quo is maintained by hand-picking a buyer in Vidéotron, which will offer the least possible competition for them and, subsequently, for Canadians,” Lacavera wrote in an op ed published in the Toronto Star on July 2.
Interestingly, he also brought up the success of pure-play wireless company T-Mobile in the U.S., which went through a controversial merger with Sprint in 2020 that led to the U.S. government setting Dish Network up as a fourth facilities-based carrier. The article didn’t mention the contentious nature of that deal, but Lacavera pointed out that as the “un-carrier,” T-Mobile has continued to disrupt the American wireless industry.
“It’s worth noting that T-Mobile is now also the fastest growing internet provider in the U.S., all done over wireless broadband and without the need for legacy fiber or cable connections. This is what the most modern wireless service in the world looks like,” he wrote, promising that if Globalive is successful in buying back the business it started, it will operate as an independent pure-play carrier.