Rogers’ proposed deals for Shaw’s Freedom Mobile would not maintain wireless competition, watchdog says

None of the proposed offers for the sale of Shaw Communications Inc.’s SJR-B-T Freedom Cell are ample to keep competitiveness in the wi-fi field, Canada’s opposition watchdog suggests.

Toronto-centered telecom big Rogers Communications Inc. RCI-B-T is hunting to market Shaw’s Flexibility Cellular, Canada’s fourth-greatest wireless provider, to get regulatory approval of a proposed $26-billion takeover of Calgary-based Shaw.

Even so, Commissioner of Levels of competition Matthew Boswell is getting challenge with the potential potential buyers that Rogers has set in front of regulators, saying in files submitted with the Levels of competition Tribunal that they are not likely to deliver Freedom Cellular with the similar degree of economic, managerial or technical guidance as Shaw.

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On Monday, the level of competition watchdog utilized to the tribunal to block the merger of the country’s two most significant cable networks. The Level of competition Bureau stated in aid of that software that Shaw has previously stopped competing for cell phone business since the merger offer was struck.

The bureau is also requesting an injunction to avert the telecom providers from closing the deal till the application can be heard.

The go by the levels of competition watchdog is a big setback for the cable takeover, which would reshape the country’s telecom landscape. Rogers and Shaw have explained they want bigger scale to shift promptly on the rollout of 5G wi-fi companies and to compete efficiently towards global streaming giants. The organizations have vowed to oppose the bureau’s application.

The Competitors Bureau, in the meantime, argues that Shaw and Rogers are close opponents in the wireless industry and that the merger, even with the sale of Liberty to a new proprietor, would consequence in larger cellphone bills.

Particulars of Rogers’ proposed agreements to market Freedom Cellular are redacted in the files, which ended up posted to the Competitors Tribunal’s web site on Tuesday. The Globe has previously documented that Stonepeak Infrastructure Partners, a New York-based personal fairness fund that owns rural web service provider Xplornet Communications Inc., is amongst the opportunity customers that Rogers has presented to regulators.

On Tuesday, The Globe reported that Rogers has also presented regulators with an provide from a consortium that features British Columbia Very first Nations, the LiUNA Pension Fund of Central and Eastern Canada, infrastructure investor Fengate Asset Administration and the Aquilini relatives, which owns the Vancouver Canucks.

Other suitors that have expressed fascination in the carrier incorporate Quebecor Inc., which owns Montreal-primarily based telecom Videotron Ltd., and Flexibility Mobile founder Anthony Lacavera.

The level of competition watchdog says that, underneath the proposals Rogers has place ahead, Flexibility would facial area “substantially bigger hurdles” to growing its network and rolling out 5G than it would have under Shaw’s ownership.

Separating Freedom Cell from Shaw’s community infrastructure would lower the carrier’s ability to offer bundled companies, the regulator explained.

The provider also sat out the most the latest federal auction for wi-fi airwaves, placing it in a “disadvantageous placement for upcoming growth,” the regulator said. If it is bought, “Freedom will call for the infusion of substantially increased financial investment in purchase to productively deploy a 5G network when compared to that necessary by Shaw in the absence of the merger,” Mr. Boswell explained.

Nonetheless, BMO analyst Tim Casey famous that Shaw set itself up for sale simply because it does not would like to keep investing in its wireless business. “We feel an outright rejection of this deal would not satisfy the government’s situation of a 4-player industry,” Mr. Casey wrote in a exploration take note on Sunday.

Rogers and Shaw reported in statements on Monday that they continue to be fully commited to closing the deal and are doing the job towards marketing Freedom Mobile in its entirety.

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