Company sent a letter to ISED and Competition Bureau and is preparing ad blitz
By Ahmad Hathout
THE COMPANY THAT formerly owned the assets of what is now called Freedom Mobile has not given up on reacquiring them, despite a deal announced earlier this month that (pending relevant approvals) would see Rogers sell the wireless assets to Quebecor to satisfy regulators looking at its proposed acquisition of Shaw Communications.
Globalive Capital on Friday sent a letter to Innovation Minister Francois-Philippe Champagne and Competition Commissioner Matthew Boswell – with a copy to Prime Minister Justin Trudeau – further pitching its case as being a better suitor than Quebecor’s telecom subsidiary Videotron, which agreed to purchase the assets for $2.85 billion. (Globalive owned Wind Mobile, which became Freedom Mobile in 2016, following Shaw’s purchase of the company for $1.6 billion.)
“Rogers’ latest proposal, a sale of Freedom Mobile to Quebecor Inc.,” the letter reads, “is another in this series of ersatz remedies that – at a price that is nearly $1 billion dollars lower than the written offer they received from us – fails to address the anti-competitive consequences of the Merger, including elements of a solution that the Commissioner has expressly and publicly identified (most recently, that a sale of Freedom Mobile alone would not remedy the anti-competitive aspects of the Merger).”
The letter, signed by Globalive chairman Anthony Lacavera, comes a day after another letter emerged, which said Rogers, Shaw, and the Competition Bureau agreed to sit in front of a mediator to hash out the issues the bureau has raised and which it has proposed to the Competition Tribunal as the reasons it should block the deal. Boswell initially said the sale of Freedom Mobile would not be enough to mitigate the harm to competition that would allegedly stem from the deal.
Lacavera claims in the letter that despite Shaw’s main wireless brand scooping up wireless customers through promotions as its Freedom brand has lost subscribers, the Videotron deal does not include Shaw’s wireless assets. Lacavera said his company, which presented a $3.75-billion offer to Shaw, is willing to purchase both Freedom and the Shaw brand wireless unit.
“Rogers has consistently refused to engage with us, or our offer, up to and including the date of this letter,” the letter added. “Rogers is just pretending that our offer does not exist.”
Lacavera makes further claims in the letter questioning Videotron’s competence with the assets, including its long-time focus on its home market in Quebec, lack of new infrastructure or network outside of that province, and its sale to Shaw in 2017 of 700 MHz spectrum it acquired during auction, which was contemplated to be used as a possible move to build outside of its home turf.
“Rogers will always choose a weaker competitor over a stronger one as this is obviously the best business decision for Rogers,” Lacavera told Cartt.ca. “This is why government intervention is needed to ensure the buyer of Freedom is good for Canadians and not just good for Rogers’ shareholders.”
Last month, Globalive and Telus signed a 20-year network and spectrum sharing agreement that is contingent on the sale of Freedom to the former. Lacavera said this will allow Globalive to operate a fourth major wireless carrier with the same network experience as the big three.
The broadcasting side of the $26-billion deal between Rogers and Shaw, announced in March 2021, has already been approved by the CRTC, which requires concessions from Rogers including millions of dollars toward Canadian content funds. The only test left for the proposal, beside mediation at the Competition Tribunal, is Innovation Canada’s spectrum transfer evaluation.
“The question for Canadians is will Minister Champagne side with the legacy cable monopolies and keep prices high or will he side with Canadians and ensure a truly independent and real competitor is the buyer of Freedom so prices come down?” said Lacavera.
Lacavera’s push does not stop at the federal government. According to an email Cartt.ca has seen, he is also pursuing a media and advertising campaign that may launch in the next few weeks.
