Reaction to the $26 billion Rogers-Shaw merger in Alberta was mixed the day it was announced.
Bob Schultz, a professor at the University of Calgary’s Haskine School of Business, called the merger a “victory.”
“It’s a blockbuster deal for Canada, but it could be the star of (rural telecommunications) in developing countries for the world, which we’re actually testing here,” Schultz said Friday.
He noted that Canada’s sprawling pockets of population present a unique operating environment for telecom companies, and face competition from emerging companies like Elon Musk’s Starlink.
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Brad Shaw, executive chairman and CEO of Shaw, said the deal was an “exciting new chapter” for communications in the country.
“In today’s telecommunications industry, we recognize that companies need greater scale to compete and continue to invest in future technologies,” Shaw said in a statement. “This merger will provide the scale necessary for the future success and competitiveness of the wireline business that Shaw has built over the past five decades.”
Schultz was quick to point out that while the merger would reduce the two telcos into one, the condition that Shaw’s Freedom Mobile be sold to Quebecor-owned Videotron would help competition in the cell phone market.
“Consumers might think it’s a bad idea if the two go together, but if Videotron comes in because they have lower prices, that might force the Rogers-Shaw combination down.”
The U of C professor said the terms of the merger are likely to put additional pressure on existing telecommunications companies.
“If Videotron decides they’re going to expand, then Bell has to do something a little different to compete or decide they’re going to compete less in the West and more in the East,” Schultz said. “And it will also be interesting to see what happens with Telus, because now Telus will have a stronger competitor to compete with in the west.”
Alberta pledges to keep the merger under conditions
Technology and Innovation Minister Nate Glubish said the Alberta government will be “unwavering” in holding the combined companies accountable for “the terms of this deal and the commitment to Alberta jobs, consumers and communities.”
“We will closely follow Rogers’ call to create nearly 3,000 jobs in Western Canada and invest another $1 billion to connect rural, remote and aboriginal communities to high-speed Internet,” Glubish said, noting the investment aligns with the province’s broadband strategy. .
He welcomed the introduction of Videotron’s low-cost mobile offering, which should include rates 20 percent lower than current offerings and invest $150 million in their network.
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“While the telecommunications sector remains under the exclusive jurisdiction of the federal government, we will hold Rogers and Shaw to their commitments in this deal and protect the interests of Albertans going forward.”
An opposition municipal affairs critic called the merger “a loss for an iconic Alberta company.”
“(The show) has deep roots in the province that go back almost 60 years, employing hundreds of people at their headquarters in Calgary and thousands across Western Canada,” Calgary-Buffalo MLA Joe Ceci said in a statement.
Chesi said a deal of this size would change the nation’s telecommunications landscape and could jeopardize jobs, increase costs for customers and reduce access to services.
One of the 21 provisions made by the federal government was for Rogers to establish a western headquarters in Calgary.
“I am encouraged to see these terms included in the deal and we will be watching closely to ensure they are implemented,” Chesi said in a statement. “However, it is troubling that Daniel Smith’s government failed to protect Alberta. They sought the status of a mediator in the transaction, but they did not take a position.”
Albertans oppose ‘less choice’
Calgary student Ashmal Daudani approves of the government’s encouragement of competition and called the Rogers-Shaw deal “only good for bigger corporations.”
“Simply selling the mobile assets to another company is a short-term solution. It doesn’t really seem that long-term,” Daudani said. “I think we have the highest phone bills in the world, and I don’t think that’s going to change with a small step like this.”
Nicole Fleming said the merger could limit options for customers like her.
“I like to have more choice with my cell phone providers and internet providers, so I don’t like the idea (of a merger),” Fleming told Global News. “It gives me less choice as a consumer. “.
Shaw Communications and Corus Entertainment, the parent company of Global News, are owned by the Calgary-based Shaw family.