Review of Rogers-Shaw merger continues with testimony from industry analysts

A review of the proposed $26-billion purchase of Shaw Communications by Rogers Communications continues into its third day in Ottawa today before a committee of federal MPs.

The deal announced March 15 needs regulatory approval to go forward. Rogers directly competes in some markets with Shaw’s Freedom Mobile, which is Canada’s fourth-largest wireless carrier.

Quebecor CEO Pierre Karl Peladeau said last week the takeover of Freedom Mobile would undermine 15 years of government policy supporting strong competitors to the country’s three biggest wireless carriers.

Peladeau said his company’s Videotron wireless, cable TV and internet service provides a strong competitor in Quebec and the Eastlink communications business plays a similar role in Atlantic Canada, but the merger would eliminate a strong competitor in Ontario and Western Canada.

2:14 Rogers $26B plans to buy Shaw under scrutiny

Meanwhile, chief executives of Rogers Communications Inc.’s and Shaw Communications Inc. told MPs previously that they believe every Canadian will benefit from a combination of their two businesses, which need to be bigger to be more competitive.

Both Brad Shaw and Joe Natale argued the $26-billion plan for Rogers to buy Shaw Communications and Freedom Mobile will help Canadians by allowing the companies to concentrate on building a new generation of networks.

Shaw testified that the Calgary-based company founded by his father isn’t big enough on its own to make the billions of dollars in future investments that will be necessary for it to build a competitive 5G wireless network.

On Tuesday, the Commons industry, science and technology committee is scheduled to hear from Michael Geist and Dwayne Winseck, academic experts who study the Canadian telecommunications industry.

Other witnesses set to appear include representatives from the Canadian Media Concentration Research Project, the Competitive Network Operators of Canada, internet provider EBOX Inc., Mayor Jim Wood of Red Deer County in Alberta and senior economist Robin Shaban of Vivic Research.

The committee’s approval isn’t a condition of the Rogers-Shaw deal, but MPs on the committee could be influential with their respective parties ahead of other regulatory decisions.