(Toronto) Globalive Capital announced Thursday that it has signed a network and spectrum sharing agreement with Telus, hoping it will improve its offer to buy Freedom Mobile.
Posted at 5:02 p.m.
Shaw Communications is seeking to get rid of Freedom, its wireless operator, in order to promote as much as possible the conclusion of its proposed merger with Rogers Communications, valued at 26 billion.
The sale of Freedom is expected to be a condition of Innovation, Science and Economic Development Canada’s green light for the marriage between Rogers and Shaw, and is seen as the best way to maintain competition in the wireless industry while allowing the merger to move forward.
However, the deal also faces opposition from the Competition Bureau, which says the merger should not go ahead even if Freedom Mobile were to change hands.
In documents filed May 9 with the Competition Tribunal, the regulator argued that the sale of Freedom Mobile would not add competition to the telecommunications sector, saying the new owners “(would) be likely to provide less effective financial, managerial, technical or other support,” which would make it more difficult for the provider to compete against the three telecommunications giants of Rogers, BCE and Telus.
In court documents, the Competition Bureau also said the proposed deal between Rogers and Shaw would erase more than a decade of regulatory efforts to boost competition in the telecommunications sector.
Globalive’s agreement is conditional on its acquisition of Freedom Mobile.
Globalive founder and chairman Anthony Lacavera said his company’s ownership of Freedom would lower cell phone bills and give customers “the same network experience” as customers of major Canadian telecommunications companies. .
Lacavera also said he would continue to invest in Freedom and grow the network if Globalive’s bid for the carrier is successful.
“We plan to move forward and acquire more spectrum in the upcoming auctions, which we will then share in the spectrum and network sharing agreement with Telus, and to further expand the network capabilities of Freedom,” he said in an interview.
Mr. Lacavera added that his offer would address the concerns of the Competition Bureau regarding the sale of Freedom and the Rogers-Shaw deal as a whole.
A skeptical observer
Still, Carleton University professor Dwayne Winseck doesn’t think the arrangement will be enough to satisfy the Competition Bureau.
“I just don’t see how the concerns raised by the Competition Bureau in its application to the Competition Tribunal would be outweighed by this,” he said in an interview.
Mr Winseck added that he was also skeptical of the deal, since he believes it runs counter to Telus’ business interests and the efforts of major telecom operators over the years to limit essentially the ability of independent mobile operators to develop as viable rivals.
“We’re being asked to accept that Telus will sort of step out of character and allow Freedom to become a very great player in that it will have the resources and the access to compete with Telus, Rogers and Bell on the basis of price, availability of access, and size of data plans, and I don’t see how that could happen. »
He added that Telus would “keep Freedom on a leash” and not allow it to compete on price or data plans.
Telus already has a network-sharing deal with Bell, which could further complicate Globalive’s deal, Winseck added, and should likely be brought into the discussion.
In addition to Globalive, Quebecor has expressed an interest in the wireless service provider. Meanwhile, internet service provider Xplornet Communications has reportedly been presented to regulators as a potential buyer.
Mr. Lacavera said he would like to see a carrier based in the United States, such as T-Mobile, if Globalive is not the successful bidder.
Freedom Mobile, formerly known as Wind Mobile, was founded by Mr. Lacavera in 2008. After financial problems and foreign ownership issues, Wind Mobile was sold to Shaw in 2016 and changed its name.