Chatham-based TekSavvy Solutions Inc. is criticalizing the decision by François-Philippe Champagne, Minister of Innovation, Science and Industry of Canada, to approve the largest telecom deal in Canadian history.
Rogers Communications Inc. and Shaw Communications Inc. announced Friday their historic $26-billion merger is expected to close sometime before April 7 after receiving final regulatory approval.
The media release issued Friday by TekSavvy, Canada’s largest independent telecom service company, said in approving the deal Champagne ignored the advice of the Competition Bureau, the House of Commons Industry Committee and “the vast majority of Canadians, all of whom vocally opposed it. ”
“He also failed to keep a commitment he made last fall, that he would wait until there was legal clarity surrounding the merger before rendering his final decision,” the release said.
TekSavvy noted just last week, the CRTC (Canadian-Radio-television and Telecommunications Commission) opened its investigation into anticompetitive wholesale agreements at the center of the merger.
TekSavvy said it is challenging these unlawful agreements after Rogers confirmed it will grant Videotron access to its broadband network at preferential rates below the CRTC’s regulated rates, which will allow the oligopoly to kill what few smaller competitors remain.
“The minister approved this anticompetitive merger despite the CRTC’s ongoing investigation,” said Peter Nowak, TekSavvy’s vice-president of insight and engagement in the release.
“In the middle of a cost-of-living crisis, this decision further consolidates Canada’s telecom market and guarantees even higher prices for consumers,” added Nowak.
TekSavvy previously has urged that federal approval of Rogers-Shaw merger be contingent on first enacting the 2019 decision by the CRTC to lower regulated wholesale rates.
The independent telecom said in May 2022, Champagne declined to implement that CRTC decision and, instead, endorsed much higher rates, “as requested by Rogers, Shaw, Videotron and others.”
TekSavvy said less than a year later, Shaw and Freedom Mobile “are just the latest dominoes to fall in the rapid, ongoing collapse of competition in Canada’s telecom sector.”
The company added this merger follows Bell’s acquisition of Ebox, Distributel and Primus; Videotron’s purchase of V-Media; Telus’s acquisition of Start.ca and Altima; and Cogeco’s acquisition of Oxio, among others.
“TekSavvy hopes that the CRTC’s investigation into Rogers’ and Videotron’s unlawful wholesale agreements results in meaningful action and stops the further dismantling of competition in the telecom market,” stated the release.
Meanwhile Rogers president and CEO, Tony Staffieri, said, “We are very pleased to move forward with this transformative merger and proudly deliver on our commitments to enhance and expand network coverage, connect underserved communities, and improve access for low-income Canadians.
“Building on a shared legacy with Shaw, we will invest substantially to bring more choice, more value and more connectivity to Canadians across the country,” he said.
With files from The Financial Post