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...

An Apple store in New York, on Oct. 16, 2019. MIKE SEGAR/Reuters As Canada’s top telecommunications companies face pressure to ensure Canadians can reach emergency responders in the event of a major outage, Apple AAPL-Q is rolling out a new service that will accomplish just that. The Cupertino, Calif., tech giant says its new Emergency SOS system, available on iPhone 14 devices in Canada this week, will help people without cellular or Wi-Fi service connect to a satellite to report an emergency or call for help in even the most remote locations. “There are always places that you will never be able to fully cover with cell towers like national parks or rural areas, and so when there is an emergency it becomes a problem very fast,” said Maxime Veron, Apple’s director of iPhone product marketing. “Imagine that you are hiking, for instance, and you’re on your own and you fall and break something or you roll your ankle, and the night is coming and you haven’t seen anyone for an hour. You k...

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...

Bank of Canada senior deputy governor Carolyn Rogers takes part in a news conference in Ottawa, on Oct. 26. PATRICK DOYLE/Reuters Recent homebuyers with variable-rate mortgages will find the adjustment to higher interest rates more painful, said Bank of Canada senior deputy governor Carolyn Rogers. Speaking before the networking group Young Canadians in Finance in Ottawa Tuesday, the senior deputy governor said the share of households with a variable-rate mortgage has increased over the last year. These mortgage holders are especially affected by interest rate hikes. “Mortgage costs for some Canadians have already increased, and they will likely increase for others in time,” Rogers said, according to her prepared remarks. Housing activity boomed during the pandemic as Canadians rushed to take advantage of low interest rates. Now, as interest rates climb back up, recent homebuyers with variable-rate mortgages are seeing their borrowing costs go up. New research from the Bank of Canada...

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...

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...

Michael Emory, CEO of Allied Properties REIT, stands in the lobby of offices on Adelaide in Toronto. Ashley Hutcheson/Tausi Insider Office property owner Allied Properties REIT AP-UN-T is considering the sale of its data-centre portfolio, a deal that would help the commercial landlord pay down debt as it retools for a new era of higher interest rates and hybrid working. Allied, best known for its low-rise office buildings in downtown cores, currently owns three data-centre properties in downtown Toronto. In a statement Thursday, the REIT said it is “exploring the sale” of these properties, the largest of which is 151 Front St. West, a major telecom hub. The company values the portfolio at $1.3-billion. Data centres, which house servers and telecommunications equipment, are not core to Allied’s property portfolio – they comprise 16 per cent of net operating income. But chief executive officer Michael Emory has long been bullish on them, in part because their industry is a relatively s...

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...