Rogers, Shaw merger will result in competition, CEOs tell committee (updated)

COGECO

29/03/2021 20:30

(Adds details from hearing)
    By Moira Warburton
    VANCOUVER, March 29 (Reuters) - A merger of Rogers
Communications Inc  RCIb.TO  and Shaw Communications Inc
 SJRb.TO  would result in sufficient market competition, their
chief executives said on Monday, as a Canadian parliamentary
committee grilled the firms' officials on anti-trust aspects of
the deal.
    Rogers agreed to buy Shaw  SJRb.TO  in a C$20 billion ($16
billion) deal that would create Canada's second-largest cellular
and cable operator. But the Canadian government was quick to say
it would attract stiff regulatory scrutiny.  urn:newsml:reuters.com:*:nL4N2LD308
    "I truly believe that these two companies coming together
and the investments that are going to be made, there will be as
much competition in the future as there was in the past," Shaw
CEO Brad Shaw told a parliamentary committee in a livestreamed
hearing.
    The deal represents Rogers' second attempt in less than six
months to consolidate Canada's concentrated C$53.1 billion
telecoms market, in which the top three operators control about
90%. Rogers' effort to buy Cogeco Inc's  CGO.TO   Canadian
assets was rebuffed by Cogeco's top shareholder in September.
 urn:newsml:reuters.com:*:nL4N2FZ343
    Competition will not be "lessened because of this change; if
anything it will be intensified," Rogers CEO Joe Natale told the
committee.
    Both men repeatedly deferred to the government's regulatory
review process when pressed on measures such as divesting Shaw's
Freedom Mobile, a smaller telecoms carrier.
    The deal has triggered particular concern about Canada's
upcoming 5G spectrum auction, which was delayed for a year due
to the COVID-19 pandemic and is scheduled for June.
    Smaller companies will be hard-pressed to participate, said
Anthony Lacavera, a Canadian telecoms executive who originally
founded what is now Freedom Mobile, because of the challenges of
raising capital in a consolidated market.
    "I'd be going to investors and saying, 'We're not sure that
we can get any of the spectrum, and the rules don't really allow
us to ensure we get any,'" Lacavera said.
    Canada's mobile wireless plans are among the most expensive
in the world, according to the most recent government study from
2019.
    Last year, Prime Minister Justin Trudeau's minority Liberal
government ordered Canada's top three telecom operators to cut
prices on their mid-range wireless service plans by 25% within
two years or face regulatory action.
    Rogers' shares were up 1% after the hearing, while Shaw's
were up by 0.35%.

 (Reporting by Moira Warburton in Vancouver; Editing by Dan
Grebler)
 ((Moira.Warburton@thomsonreuters.com; 416-687-7996;
437-771-3124;))