Rogers and Shaw Communications executives have said plans to merge their two companies will increase competition and improve networks.
The two telecommunications companies testified in a virtual hearing before the Industry, Science and Technology Committee in Ottawa on March 29.
Rogers CEO Joe Natale told MPs the proposed acquisition will advance 5G, create jobs and diversify the Canadian economy. He said that together the companies would be able to create a nationwide Internet service provider.
Natale argued that the merger would allow the two companies to compete head-on with Telus in Western Canada. He also said the competitive intensity within the Canadian telecommunications industry would not change.
When asked why the two companies see the proposed merger as a necessary step within the telecommunications industry, Natale said Rogers and Shaw could do more together.
“Together, we can go further and faster. This is an opportunity to take the breadth and depth of Shaw’s fiber optic network in the west, combine it with our wireless capability and bring it all together to create the best of both worlds, ”said Natal.
Shaw Communications CEO Brad Shaw told the committee that competition would intensify under the new deal and that Rogers and Shaw could compete more effectively together than if they remained apart.
“We can’t look back at what might have worked in the past. As we look to the future, it is clear that Shaw cannot build what Canada needs on its own, ”said Brad Shaw during the hearing.
He also pointed out that Shaw Communications could not afford to build a competitive 5G network on its own due to the billions of dollars required in investments.
Concerns about eliminating the fourth player
Critics have argued that the proposed acquisition will lead to less competition as it eliminates a fourth player from the industry.
Conservative MP Pierre Poilievre asked Shaw executives about earlier statements in which they argued that a fourth competitor forced the big three (Rogers, Bell and Telus) to lower prices and increase competition.
Poilievre said Shaw is now downplaying the importance of a fourth competitor in delivering lower prices to customers and that the company is now contradicting itself.
“These comments were made in the context of supporting facility-based carrier constructions. I think those comments can coexist, ”replied Shaw President Paul McAleese.
McAleese also added that Shaw believes that a dynamic competitive environment drives prices down. He said that while Shaw has had some influence on the Big Three by reducing overage fees and offering more data at lower prices, the Big Three have also taken the initiative to do so on their own. .
Rogers argued that the acquisition will build on the legacy of two Canadian family-owned businesses and that together they will have the capacity to make unprecedented investments in broadband and wired and wireless networks.
Acquisition project submitted for approval
The proposed deal requires the approval of the Canadian Radio-television and Telecommunications Commission (CRTC), the Competition Bureau and the federal Department of Innovation, Science and Economic Development.
The Minister of Innovation, François-Philippe Champagne, declared that the government is committed to increasing accessibility, competition and innovation and that “these objectives will be at the center of the analysis of the implications” of the proposed merger.
In addition, the Competition Bureau has issued a statement stating that “if the Bureau determines that the proposed transaction is likely to significantly reduce or prevent competition, we will not hesitate to take appropriate action.”
Rogers has previously said the companies expect to receive approval by early 2022.