Champagne lays out conditions for Vidéotron’s acquisition of Freedom

While the Minster has rejected Rogers' original proposal to merge with Shaw, the takeover is still possible

Industry Minister Francois-Philippe Champagne has rejected the original merger proposition put forward by Rogers and Shaw.

“Today, I officially denied that request,” Champagne said Tuesday evening. “My decision formally closes that chapter of the original proposed transaction.”

But the merger is still open to be completed, granted Champagne’s conditions attached to the sale of Freedom Mobile are approved.

Champagne’s conditions include Vidéotron agreeing to keep wireless licenses it acquires from Freedom for 10 years. He also expects wireless bills to drop by 20 percent in Ontario and Western Canada, keeping in line with Quebec.

“A new service provider needs to be in it for the long run,” Champagne said.

A response released by Quebecor CEO Pierre Karl Péladeau signals the company is open to accepting Champagne’s conditions.

“We intend to accept the conditions stipulated by the Minister and incorporate them into the new version of the Rogers-Shaw/Quebecor-Freedom Mobile transaction, which has already been negotiated,” Péladeau’s statement read.

“They are in line with our business philosophy, which has proved highly successful in Quebec, where we have taken a significant market share in a very short span of time.”

However, critics are not in support of Champagne’s plans. OpenMedia says the Minister is backing telecom companies and failing Canadians. Speaking on the condition to lower wireless prices, OpenMedia says Champagne’s office hasn’t shared methods for how they will monitor and enforce the rule.

“Any version of the Rogers-Shaw deal means higher prices and fewer choices for ordinary consumers,” Matt Hatfield, OpenMedia’s campaigns director, said in a press release.

Champagne provides only one avenue of approval for the merger. The Canadian Radio-television and Telecommunications Commission (CRTC) approved the broadcasting part of the merger earlier this year. The third avenue of approval, through the Competition Bureau, will be examined later this week when the parties enter a scheduled meditation.

According to The Globe, the parties will discuss a settlement proposal from Rogers to see the company sell its fibre-optic infrastructure to Quebecor. Doing so will reportedly quash concerns the company doesn’t have enough infrastructure outside of Quebec to support the growth of Freedom Mobile.

However, the mediation may end with no resolution, as seen in the past. If that’s the case, the parties will enter a hearing with the Competition Tribunal early next month.

Source: The Canadian Press, Quebecor, OpenMedia, The Globe and Mail