TORONTO, Dec. 1, 2022 /CNW/ - As the evidentiary portion of the Rogers-Shaw hearings comes to a close, Globalive Capital today issued the following statement:
"The Rogers-Shaw hearings have revealed how much the deck is stacked against Canadians at a time when many are desperate for financial relief, and looking for a genuinely competitive alternative to the long-standing telecom oligopoly.
Over the last four weeks, testimony has repeatedly unearthed serious issues with the proposed merger of Rogers and Shaw, and the proposed remedy of Videotron as the buyer of Freedom Mobile.
The Competition Act, which has never been used to successfully stop an anticompetitive merger, was developed and introduced at a time when Canada was looking to bolster large corporations. As a result, and as our government and the Commissioner of Competition have recognized, this outdated Act continues to favour and benefit the likes of Rogers, Shaw and Videotron over the interests of Canadians, and is in the middle of an announced overhaul.
Also made clear is that even as Canadian consumers suffer, wealthy executives stand to become even richer on the backs of this anticompetitive transaction. A Rogers executive let slip that he would be paid $2 million if this deal is finalized, alongside the disclosure that $50 million in bonuses would be paid to Shaw executives. There can be no doubt that these bonuses reflect the true incentives of Rogers and Shaw. These companies are not motivated by consumer interest, but rather continuing to line their own pockets.
Fortunately, Canada's competition watchdog, Commissioner Matthew Boswell, has no such personal incentive, and has continued his unflinching opposition to this merger, including the proposed sale of Freedom Mobile to Videotron. Commissioner Boswell and his expert witnesses cite serious concerns about higher prices and decreased innovation for Canadian consumers, resulting from the proposed transfer of Freedom Mobile to Videotron.
If the proposed transfer to Videotron is ultimately permitted by the Tribunal, this would be yet another failure of the flawed Act, not a failure of the Commissioner. It will be up to Minister Champagne to stand with his Commissioner, and on the side of Canadians, to prevent this merger from proceeding.
Simply put, Videotron is not an adequate remedy to the anti-competitive consequences of this proposed merger because it is not a true, independent pureplay operator - and pureplay is what Canada is sorely lacking. The best-known example of the impact of pureplay is T-Mobile in the US, which successfully disrupted the market, returning $130 billion in savings to US subscribers since their entrance in the market.
Moreover, the history of Videotron parent company Quebecor as it relates to choosing profits over innovation serves as another red flag for Canadians. As noted in evidence several times during this this hearing, despite years of professing to expand beyond Quebec, Videotron has instead bought spectrum at a steep discount, intended to enable competition in Ontario, BC, and Alberta only to flip it to established operators in those markets for a huge profit - a total of $330.9 million, with no benefit to Canadian consumers whatsoever.
Globalive remains the only pureplay operator with the means to purchase Freedom Mobile - and also has a history of fostering national innovation in the wireless space.
Globalive's bid to purchase Freedom Mobile at a $900 million premium over Videotron remains open, and is a reminder that Canada has choices. These choices will deliver the relief to phone bills that Canadians are demanding, and a return to the innovation that true competition delivers."
About Globalive Capital
Globalive has founded or co-founded and operated 12 operating companies over the past 25 years in the telecommunications industry, including WIND Mobile which was sold to Shaw Communications for $1.6 billion. Globalive Capital manages Globalive's diversified investment portfolio across multiple asset classes including venture, private equity, real estate, and infrastructure. Globalive Ventures has made over 125 early-stage technology venture investments and is well-known as a strategic, entrepreneur friendly investor. Globalive has been a founding sponsor of leading incubators and accelerators including NEXT Canada and the Creative Destruction Lab, and the Globalive team serves as directors and advisors across the startup ecosystem. Globalive Media focuses on the innovation ecosystem and produces the show Beyond Innovation (beyondinnovation.tv) that airs globally on the Bloomberg platform. For more information, visit www.globalive.com.
SOURCE Globalive Capital
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