Tausi Insider

A Freedom Mobile store on Queen St. West near Spadina Ave. in Toronto is photographed on Sept 26, 2022. Fred Lum/the Globe and Mail Independent internet service provider Distributel Communications Ltd. attempted to acquire Freedom Mobile, the wireless carrier that Rogers and Shaw have agreed to sell in an attempt to win regulatory blessing of their $26-billion merger, the Competition Tribunal heard on Thursday. Rogers Communications Inc. and Shaw Communications Inc. ran a sale process for Shaw’s Freedom Mobile, Canada’s fourth-largest wireless carrier, earlier this year. In June they announced that they had struck a deal to sell Freedom to Montreal-based Quebecor Inc. for $2.85-billion. Christopher Hickey, the director of regulatory affairs for Distributel, provided testimony on behalf of the Competition Bureau as part of a weeks-long Competition Tribunal hearing into the proposed merger of Rogers and Shaw. Explainer: A cheat sheet on why the Competition Bureau is taking the Rogers-S...

Quebecor’s president and chief executive officer Pierre Karl Peladeau arrives at the Competition Bureau for mediation talks on the Roger-Shaw deal on Oct. 27 in Ottawa. Dave Chan/Tausi Insider Dvai Ghose is principal at Ghose Investment Corp. His clients include Telus Communications Inc. He is the former head of global research and strategic development for Canaccord Genuity Group. On the surface, there is sense in allowing Rogers RCI-B-T to buy Shaw SJR-B-T if the latter’s Freedom Mobile is sold to Quebecor QBR-B-T, as is currently proposed. Since 2009, Quebecor has successfully built a fourth wireless carrier in Quebec, won about 20 per cent of market share and helped drive lower pricing. Having Freedom under Quebecor would surely alleviate any concerns that a combined Rogers-Shaw would unfairly dominate the market. So why hasn’t this been enough to win the support of the Competition Bureau, which is currently challenging the deal before the Competition Tribunal? Here is the real p...

Sean Kilpatrick/The Canadian Press Shaw Communications Inc. SJR-B-T has not recouped the $4.5-billion it has invested in its wireless business since 2016, an executive for the Calgary-based telecom told a Competition Tribunal hearing into the proposed $26-billion merger of Rogers Communications Inc. RCI-B-T and Shaw. Trevor English, chief financial and corporate development officer at Shaw, said the investment, which includes the $1.6-billion that Shaw paid to acquire wireless carrier Freedom Mobile, is “net negative” by about $3.3-billion. Shaw has also not generated any free cash flow from its wireless business, he noted. “We have not been able to increase our dividend since 2016 when we made the investment into Wind,” Mr. English said. (Shaw rebranded Wind Mobile to Freedom Mobile in late 2016.) As part of the proposed merger between Rogers and Shaw, the cable companies have agreed to divest Freedom, Canada’s fourth-largest wireless carrier, to Quebecor Inc.’s QBR-B-T telecom sub...

A government-mandated reduction in wireless prices by Canada’s three largest carriers had “significant and detrimental effects” on Shaw Communications Inc.’s Freedom Mobile, a Shaw executive told the Competition Tribunal hearing into the telecom’s proposed $26-billion merger with Rogers Communications Inc. Shaw president Paul McAleese told the tribunal that Ottawa’s request in 2020 that Rogers, BCE Inc. and Telus Corp. reduce the prices of their mid-tier cellphone plans over two years was “singularly the most traumatic event for the Freedom pricing construct.” Explainer: How the Rogers-Shaw merger ended up in front of the Competition Tribunal Shaw has yet to recoup $4.5-billion investment in Freedom Mobile, CFO tells tribunal Freedom Mobile typically charged about 25 to 30 per cent less than its larger competitors on account of having a “less mature” wireless network, Mr. McAleese said. That left the carrier in a difficult position when BCE’s Bell, Telus and Rogers dropped the prices...

Provinces peppering the public with cash to deal with soaring prices compounds inflation rather than easing it, economists say. They say the tactic used by Alberta this week and B.C. and Quebec earlier this year fails to quell inflation because having extra money means people will continue spending and demand for products and service will stay high, keeping decades-high inflation from budging. If people had less money to spend while prices were high it would weigh on inflation, they say. Inflation sat at 6.9 per cent last month down from 8.1 per cent in June. Giving money to households is “likely to contribute to the problem as opposed to solving it,” said Travis Shaw, senior vice-president of public finance at DBRS Morningstar. “It does contradict what the Bank of Canada is trying to do with monetary policy in terms of trying to take some heat out of the system and ultimately bring down inflation,” he said. His remarks come a day after Alberta Premier Danielle Smith announced her In...

Brad Shaw, the CEO and executive chair of Shaw Communications Inc., appears before a CRTC hearing in Gatineau, Que., on Nov. 22, 2021. Dave Chan/Tausi Insider A Competition Bureau lawyer grilled Brad Shaw, the CEO and executive chair of Shaw Communications Inc., SJR-B-T about the roughly $2.3-billion his family stands to receive if their company is successfully acquired by Rogers Communications Inc. RCI-B-T Mr. Shaw told the Competition Tribunal on Wednesday that his family made the “extremely difficult” decision to sell the business they had run for 50 years to Rogers for $26-billion because it was the right thing to do for all of the company’s shareholders and other stakeholders, including its customers and its employees. The company was losing market share to Telus in its internet and TV business, had not recouped the billions it had poured into its wireless division, and didn’t have the scale to make the investments needed to remain competitive, Mr. Shaw said. The Shaw family con...

The Rogers Building in downtown Toronto. CARLOS OSORIO/Reuters It is not necessary to own a cable network in order to successfully operate a wireless carrier, Rogers Communications Inc.’s RCI-B-T chief technology officer told a Competition Tribunal hearing into Rogers’ proposed $26-billion takeover of Shaw Communications Inc SJR-B-T. The comments by Ron McKenzie, the chief technology and information officer at the Toronto-based telecom giant, speak to a core issue in the merger case: whether Quebecor Inc. QBR-B-T will be able to successfully run Shaw’s Freedom Mobile without owning cable infrastructure in Western Canada. The Competition Bureau is attempting to block the merger of Canada’s two largest cable companies, arguing that the deal will reduce competition in the wireless industry, leading to higher cellphone bills and poorer service. The Competition Tribunal adjudicates on matters of civil competition and is hearing arguments on the proposed deal. Explainer: How the Rogers-Sha...

Shaw and Rogers have been trying to make the case throughout the hearing that the proposed sale of Freedom to Videotron would benefit consumers. Sean Kilpatrick/The Canadian Press A wireless communications specialist says Freedom Mobile under Videotron Ltd. would be a strong competitor in the telecom market as the hearing on Rogers Communications Inc.’s RCI-B-T $26-billion proposed takeover of Shaw Communications Inc. SJR-B-T continued. William Webb, chief technology officer at Access Partnership and a Shaw witness, told the Competition Tribunal Monday that Freedom under Quebecor Inc.-owned Videotron would not lack access to the assets or services it would need to be as effective a wireless competitor as Freedom under Shaw. Webb also said that Freedom’s costs to develop a 5G network under Videotron’s ownership would be significantly reduced. Freedom does not offer 5G connectivity and does not own 3500 MHz. 3500 MHz is spectrum that has become key for 5G innovation. Webb said the comb...

Shaw Communications Inc. SJR-B-T has reported a drop in revenue and wireless growth during its fourth quarter, as the company draws closer to hearing a final verdict on its $26-billion takeover by Rogers Communications Inc. The quarter could be among the Calgary-based cable and wireless company’s last to report as an independent entity. The Competition Tribunal is expected to issue its decision on Rogers’s RCI-B-T takeover of Shaw within months after four weeks of hearings during November and oral arguments planned for mid-December. The Competition Bureau is seeking to block the merger, arguing that the deal will lessen competition in Canada. Shaw on Tuesday reported $1.36-billion in revenue for the three-month period ended Aug. 31, down 1.5 per cent from a year ago. Its net income for the quarter was $169-million, down 33 per cent from $252-million during the same period last year, partially as a result of an $83-million increase in income taxes. In contrast to its competitors, whic...

Shaw Communications Inc. SJR-B-T has reported a drop in revenue and wireless growth during its fourth quarter, as the company draws closer to hearing a final verdict on its $26-billion takeover by Rogers Communications Inc. The quarter could be among the Calgary-based cable and wireless company’s last to report as an independent entity. The Competition Tribunal is expected to issue its decision on Rogers’s RCI-B-T takeover of Shaw within months after four weeks of hearings during November and oral arguments planned for mid-December. The Competition Bureau is seeking to block the merger, arguing that the deal will lessen competition in Canada. Shaw on Tuesday reported $1.36-billion in revenue for the three-month period ended Aug. 31, down 1.5 per cent from a year ago. Its net income for the quarter was $169-million, down 33 per cent from $252-million during the same period last year, partially as a result of an $83-million increase in income taxes. In contrast to its competitors, whic...

The Competition Tribunal hearing into the proposed $26-billion merger of Rogers Communications Inc. RCI-B-T and Shaw Communications Inc. SJR-A-X has shifted to the potential cost savings that would be generated by combining Canada’s two largest cable companies. Cost savings, or efficiencies, are a critical issue because Canadian competition law allows a merger to close if it results in lower total costs for the combined business – even if the merger lessens competition. The provision in question is called the efficiencies defence and is contained within section 96 of the Competition Act. Rogers and Shaw are not publicly disclosing the dollar value of the efficiencies that they expect their merger to generate, although several witnesses have testified on behalf of the companies with regards to these calculations. That testimony has occurred largely out of the public eye, during confidential sessions, and documents relating to the expert testimony are heavily redacted. Shaw Communicati...

The Competition Tribunal hearing into the proposed $26-billion merger of Rogers Communications Inc. and Shaw Communications Inc. is set to wrap up and final oral arguments are set to be heard on Dec. 13 and 14. Melissa Tait/Tausi Insider After 18 days of testimony, scores of witnesses and tense moments of cross-examination, the Competition Tribunal hearing into the proposed $26-billion merger of Rogers Communications Inc. RCI-B-T and Shaw Communications Inc. SJR-B-T is coming to a close. While the tribunal typically takes months to render a decision, Federal Court Chief Justice Paul Crampton, who is overseeing the hearings, said he would like to release a decision before Christmas if possible. Oral arguments are set to be heard on Dec. 13 and 14, more than a week after Thursday’s conclusion of the evidentiary portion of the hearing. The Competition Bureau is asking the tribunal to block the merger of Canada’s two largest cable companies, a deal in which Quebecor Inc.’s QBR-B-T Videot...

Videotron CEO Pierre Karl Peladeau (left) arrives at the Competition Bureau at the Competition Tribunal hearing on Oct. 27 in Ottawa. Dave Chan/Tausi Insider The Competition Bureau and three of the country’s largest cable companies have filed closing arguments offering conflicting views on how the proposed $26-billion merger of Rogers Communications Inc. RCI-B-T and Shaw Communications Inc. SJR-B-T would impact wireless competition in Western Canada. Written arguments by the two sides locked in a battle at the Competition Tribunal were made public on Friday, roughly a week after the evidentiary portion of the hearings concluded. The Competition Bureau, headed up by Commissioner of Competition Matthew Boswell, is asking the tribunal to block the deal in its entirety on the grounds that it would increase wireless prices in Alberta and British Columbia. Rogers and Shaw, along with intervenor Videotron Ltd., argue that the deal is good for competition and are asking the tribunal to dismi...

Shaw Communications Inc.’s assertion that its wireless business was not profitable “doesn’t stand up to scrutiny,” a lawyer for the Competition Bureau told a hearing into Shaw’s proposed $26-billion merger with Rogers Communications Inc. Lawyers for the Competition Bureau made their closing arguments in front of the Competition Tribunal on Tuesday, wrapping up a case that has spanned four weeks and included evidence from 45 witnesses. The Competition Bureau is asking the tribunal to block the merger of Canada’s two largest cable companies. The watchdog argues that the deal, which would see Quebecor Inc.’s Videotron Ltd. acquire Shaw’s Freedom Mobile, would leave Canada’s fourth-largest wireless carrier severely weakened. The Competition Bureau has positioned Shaw’s Freedom Mobile as a “maverick” competitor responsible for driving down cellphone bills. However, Shaw executives have testified that the carrier, which serves 1.7 million customers in Ontario, Alberta and B.C., has not ge...

Rogers and Shaw are aiming to close their merger by the end of the year, with the possibility of extending their deadline to Jan. 31. Sean Kilpatrick/The Canadian Press Lawyers representing Rogers Communications Inc. RCI-B-T and Shaw Communications Inc. SJR-B-T touted the potential benefits of their contested $26-billion merger for consumers during the final day of hearings in front of the Competition Tribunal. The Competition Bureau is asking the tribunal to block the deal in its entirety, arguing that it would result in higher cellphone bills and poorer wireless service, particularly in Western Canada. At issue is whether the divestiture of Shaw’s Freedom Mobile to Quebecor Inc.’s Videotron Ltd. for $2.85-billion would weaken Canada’s fourth-largest wireless carrier, which serves customers in Ontario, Alberta and British Columbia. The competition watchdog asserts that Videotron has no track record of operating in Western Canada, and that separating Freedom from assets such as Shaw’...