If rates don’t drop as a result of the buyout, the government promises to act
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After months of uncertainty, Innovation Minister François-Philippe Champagne has finally approved the $20 billion buyout of Shaw by Rogers. At the same time, Shaw’s telephony branch, Freedom Mobile, has been sold to the Quebecor group, the owner of Videotron.
François-Philippe Champagne demands lower rates
The sale of Shaw to Rogers has been questioned by several players and it is clear that the rates will be scrutinized. Especially since Rogers has repeatedly claimed that the buyout would result in lower rates. Minister Champagne took the company at its word and stated at a press briefing: “If Canadians do not begin to see a significant reduction in prices within a reasonable period of time as a result of this decision, I will have no choice but to seek further legislative and regulatory powers to bring prices down. And I insist that nothing is off the table.”
Regarding Québecor and the Freedom Mobile buyout, Videotron is required to keep Freedom Mobile’s licenses for 10 years. At the same time, Videotron has two years to develop 5G on Freedom Mobile’s network and will have to extend its network to Manitoba. Finally, Videotron will have to temporarily offer 10% more data to Freedom Mobile subscribers.
So this is a buyout that comes with a lot of strings attached, and it’s clear that every decision Rogers makes is going to be scrutinized. Independent operator takeovers combined with rate increases have led to battles that have resulted in mistrust. Rogers needs to know that it will have to do what’s best for former Shaw customers or risk having decisions imposed on it.
Of course, we will continue to monitor the rates of these operators and we will keep you informed of developments through our alert tool that we have made available to you.
