Canada - Telecoms, Mobile and Broadband - Statistics and Analyses

Canada - Telecoms, Mobile and Broadband - Statistics and Analyses

Merger plan of two of Canada’s telcos remains uncertain

Canada’s telecom market is dominated by the facilities-based service providers including Bell, Quebecor, Rogers, Shaw, and Telus. These companies, including their affiliates, account for about 87% of total sector revenue. While the market shares of the top five companies change slightly from year-on-year, merger and acquisition activity results in more significant market share changes.

Over the years there have been some failed deals, including one in late 2020 when Rogers and Altice USA made an unsolicited offer to acquire Cogeco. Under the proposed deal Altice would have bought Cogeco and have sold the Canadian assets to Rogers. Cogeco rejected the takeover bid.

A prolonged an ongoing merger involving Rogers and Shaw is now uncertain on competition grounds. In March 2021, Rogers had acquired Shaw’s Class A shares and Class B shares for some CA$26 billion, including about CA$6 billion of debt. The deal was subject to approvals from Innovation, Science and Economic Development Canada (ISED), the Competition Bureau, and the CRTC. The CRTC approved the deal in March 2022, which has implications for Shaw’s unit Freedom Mobile in that final approval includes the requirement that the merged operator divest its wireless business. To this end, Rogers opened talks with potential buyers of Shaw’s wireless assets, including mobile spectrum. This would satisfy existing federal policy aimed at ensuring that there was sufficient competition in the mobile market, with at four wireless providers required to be operating in any given area.

Following completion of the deal, Rogers and Shaw planned to merge their telecom and cable operations, becoming a larger company better able to invest in networks upgrades and expansion projects. However, the Competition Bureau remains opposed to the merger.