The IT Nerd

Yesterday the Rogers/Shaw merger got approved by the Canadian government. That means less competition and higher prices for Canadians. But if you believe the Canadian government (Spoiler alert: I don’t) there are guardrails in place to make sure that this is a good deal for Canadians. Here’s the TL:DR for your perusal:

“As part of these agreements and conditions, Videotron:

• Will offer plans that are comparable to those currently available in Quebec, and offer options at least 20% cheaper than those made available by the major players;
• Cannot transfer the Freedom Mobile licences for a period of ten years;
• Will have to expand its 5G wireless network in Freedom Mobile’s pre-existing operating territory within two years;
• Will expand mobile service into Manitoba via the use of a signed Mobile Virtual Network Operator (MVNO) agreement or other means and offer plans comparable to what it offers in Quebec; and,
• Will increase data allotments of existing Freedom Mobile customers by 10% as a near-term bonus while it invests to bring down prices overall.

“Separately, Rogers will also be subject to strict and legally binding commitments requiring them to make major investments to improve connectivity within the next 5 years, including:

• Creating 3,000 new jobs in Western Canada and maintaining them for a minimum of 10 years after the closing date;
• Establishing a Western headquarters in Calgary and maintaining it for a minimum of 10 years after the closing date;
• Investing $1 billion to expand broadband Internet access, at speeds of at least 50/10 megabits per second, and 5G mobile service in areas where it is not currently available;
• Investing at least $2.5 billion to enhance its 5G network in Western Canada, and $3 billion in additional network service expansion projects; and,
• Expanding access to low-cost broadband Internet plans and launching a new low-cost mobile offering for low-income Canadians.

“These agreements are subject to significant financial damages for non-compliance: up to $200 million in the case of Videotron and up to $1 billion in the case of Rogers. These agreements will be released publicly and are subject to annual reporting requirements.

“Should the parties fail to live up to any of their commitments, our government will use every means in our power to enforce the terms on behalf of Canadians.

Now that all sounds good and the potential fines sound big. Not to mention the potential fines are meant to encourage Videotron and Rogers to do everything on this list. But call me a skeptic, I really don’t see any of this bringing about more competition and lower prices. The problem with the Canadian telco space is that it’s an oligopoly. And this deal does nothing to address that. Until the folks in Ottawa figure out that there has to be a big foreign player that is allowed to enter the Canadian market, Canadians will continue to pay among the highest prices for their telco services.

This entry was posted on April 1, 2023 at 9:00 am and is filed under Commentary with tags Rogers, Shaw, Videotron. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.