Quebecor CEO Bellado says competition desk concerns about Freedom Mobile deal ‘unintelligible’

Quebecour President and CEO Pierre-Carl Pillado speaks at the company’s annual general meeting in Montreal, on May 11, 2017.Graham Hughes/The Canadian Press

The Competition Bureau’s argument that selling Freedom Mobile would not effectively address competition concerns about the proposed merger of Rogers RCI-AT and Shaw SJR-BT is “incomprehensible,” says CEO QBR-AT of Quebecor Inc.

The Competition Commissioner is trying to prevent Rogers Communications Inc. From the acquisition of Shaw Communications Inc. worth $26 billion, arguing that the deal would lead to poorer service and higher prices for wireless network customers.

To address these concerns, Rogers agreed to sell Shaw’s Freedom Mobile, Canada’s fourth-largest airline, to Quebecor for $2.85 billion. However, the competition watchdog said separating Freedom from Shaw’s cable network would make it a weaker competitor. The president and CEO of Quebec do not agree.

“It is incomprehensible to us that the competition bureau believes that the level of competition in telecommunications in Canada would be higher if the Shaw-Rogers deal was rejected,” Pierre-Carl-Bellado said Thursday during a conference call to discuss the Montreal-based company. Quarterly results with analysts.

Rogers rejects Antitrust Agency request for more time to investigate Freedom sale

Today’s deadline for Rogers, Shaw and Kibekor to reach a final agreement on the sale of Freedom

The company reported revenue of $1.12 billion during the second quarter, down 1.4 percent from the same period last year. Its profit for the three months ended June 30 was $156.3 million, up from $124.7 million a year ago.

Mr Péladeau said Freedom Mobile would be “a lot weaker” if Shaw continued to operate it, given that the wireless carrier had competed less aggressively since the merger with Rogers announced in March 2021, and it held a significant auction for 5G airwaves.

Acquiring Freedom Mobile, which has about 1.7 million customers in Ontario, Alberta and PC, would provide an opportunity for Quebecor, which owns Videotron Ltd. , to expand outside the mother province of Quebec. The company spent $830 million in a federal auction last year on 5G wireless airwaves, with more than half of that investment going to Ontario, Alberta, Manitoba and British Columbia.

During Thursday’s call, Mr. Péladeau reiterated his company’s commitment to expanding outside Quebec. Quebecor recently acquired independent internet and television provider VMedia for an undisclosed amount, a move analysts said confirmed the company’s plans to expand geographically. VMedia clients are primarily located in Ontario, as well as in Quebec and Western Canada.

If the Rogers-Shaw merger is denied, Quebecor could use the communications regulator’s new wireless policy to expand to other counties. In April 2021, the Canadian Radio, Television and Communications Commission ruled that the three major national wireless carriers – Rogers and BCE Inc. and Telus Corp. SaskTel must sell network access to eligible regional competitors.

Mr. Pelado called on the regulator to end the review of prices and related terms and conditions.

“We respectfully believe that the Competition Bureau and the CRTC should recognize that the longer they wait to act, either by agreeing to sell Freedom or by eventually creating a competitive company. [mobile virtual network operator] The longer they encourage the current oligopoly that actively limits competition outside Quebec,” said Mr. Pillado.

He added that if the merger approval process goes ahead, it could affect Freedom Mobile’s subscriber base. Meanwhile, if Calgary-based Shaw prioritizes its Shaw Mobile business, which Rogers plans to acquire, rather than Freedom, it could send the wrong message to the competition office.

“Show and Rogers should run their business as usual,” Mr. Pelado said.

Rogers said he hoped to reach a settlement with the competition watchdog and avoid a lengthy competition court hearing.

The Competition Bureau said in documents filed with the court that divestment from Freedom will not resolve the competitive concerns surrounding the Rogers-Shaw merger.

“This divestiture will not replace the significant and growing competition that Shaw Mobile has provided and will continue to offer in Alberta and British Columbia, and will make Freedom Mobile a much weaker competitor than it would have been without the proposed transaction,” the office wrote. “The significant growth in Freedom’s competitive importance under Shaw ownership clearly demonstrates the significant benefits Freedom has received from Shaw.”

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