Calling the opposition to the deal “unreasonable,” Rogers said the bureau failed to quantify why the proposed merger with Shaw would lessen competition. He added that any alleged competitive effect was outweighed by the “significant efficiencies the transaction will generate”.
Rogers, in a 19-page petition to the court, responded to the bureau’s refusal to accept Freedom Mobile’s divestiture as part of the merger remedy. Rogers asked the court to reject the bureau’s request to block the transaction.
In Canada, the top three companies – Rogers, BCE Inc and Telus Corp – account for nearly 90% of telecommunications industry revenue and consumers paid the highest mobile phone bills in the world in 2021, according to a report of Rewheel, a Finnish telecommunications research company.
High wireless prices are a hot topic and the government has vowed to bring them down.
The Competition Bureau blocked the deal and said it was not convinced Rogers’ proposal to sell Freedom Mobile would maintain competition in the industry. Freedom is a low-cost wireless service provider with approximately 1.7 million subscribers.
Rogers refuted the bureau’s claims and said Freedom Mobile would remain competitive even after it splits from Shaw because it is run as an independent business. He said “a Freedom cd will have the same competitive economic incentive it had when it was owned by Shaw.”
The bureau argued that Freedom’s new buyer would be unable to expand and deploy the 5G network to drive down wireless prices.
Rogers disputed the bureau’s claims that Shaw was a direct competitor to the company, saying its main competitors were Bell and Telus.
This week, Rogers agreed to put the transaction on hold.
($1 = 1.2588 Canadian dollars)