The federal Minister of Industry, François-Philippe Champagne, officially blocks the bulk transfer of licenses for wireless services from Shaw to Rogers and imposes conditions on a possible agreement between Shaw (Freedom Mobile) and Quebecor (Videotron).
In a scrum on Tuesday, Mr. Champagne ruled that he “closes the chapter” on the initial transaction proposed by Rogers and Shaw, which would have brought together two of the largest telecommunications companies in the country. The pact was valued at $26 billion.
However, he hinted that he could authorize a new proposal from Shaw, which is trying to sell its wireless services activities – those of Freedom Mobile – to Videotron.
The sale of Freedom Mobile was widely seen as the biggest obstacle to approval of the deal with Rogers, and Videotron agreed earlier this year to buy it for $2.85 billion.
This new transaction could go ahead on two conditions, explained Mr. Champagne: Videotron must retain any new license acquired for at least 10 years, and prices for wireless services in Ontario and Western Canada must be comparable to those offered by Videotron in Quebec.
The Minister pointed out that prices in Quebec are currently on average 20% lower than in the rest of Canada.
The transaction has already received the approval of the Canadian Radio-television and Telecommunications Commission (CRTC) and the analysis of the Competition Tribunal is underway. A mediation decision is expected later this week.
To justify his decisions, Mr. Champagne recalled his duty to promote competition and ensure more affordable prices for wireless services in Canada.
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