Impact of Rogers-Shaw Merger on Cellphone Plans in Western Canada
Following the merger between Rogers and Shaw, concerns have arisen regarding the affordability of cellphone plans in Western Canada, according to Jeanne Pratt, the Competition Bureau’s Senior Deputy Commissioner of Mergers and Monopolistic Practices.
Pratt emphasized a notable increase in the costs of cellphone plans in Western Canada subsequent to the Rogers-Shaw merger during her discussion with Members of Parliament on Monday.
She underscored Shaw’s previous role as a significant and disruptive competitor in British Columbia and Alberta, particularly in offering aggressively priced bundled wireless plans. Pratt expressed apprehension regarding Rogers’ current pricing strategies, which she believes do not align with Shaw Mobile’s pre-merger offers, as reported by the Globe and Mail.
Testimony at the House of Commons’ Industry Committee
Pratt’s remarks were part of a wider conversation during her testimony at the House of Commons’ industry committee, which is examining the accessibility and affordability of wireless and broadband services in Canada. Insights from representatives of the Canadian Radio-television and Telecommunications Commission (CRTC) also contributed to the discussion.
In response, Rogers stated that its current offerings, both regionally in Western Canada and nationally, are not priced higher than before the merger. The company reiterated its commitment to maintaining a five-year price freeze for the 500,000 Shaw Mobile customers it acquired.
Previous Concerns and Competition Bureau’s Stance
Previously, MPs had raised concerns about rising cellphone costs in January, noting an average $5 increase for certain Rogers and Bell Canada customers, with initial reports highlighting Rogers’ increases.
The Competition Bureau had initially opposed the $26-billion Rogers-Shaw deal, arguing it would diminish competition and result in higher costs, diminished service quality, and reduced options for consumers. However, the Federal Court of Appeal upheld the merger, concurring with the Competition Tribunal’s assessment that the merger would not significantly diminish competition.
Continued Monitoring and Industry Committee’s Plans
Conservative MP Rick Perkins queried whether the recent price hikes were linked to the feared reduction in competition. Pratt reiterated her concerns regarding the elimination of Shaw Mobile, emphasizing its pivotal role in driving down prices and offering bundled products in Western Canada. She stated, “Frankly, the evidence showed that Rogers was the biggest loser in that fight.”
According to Scott Hutton, CRTC’s Chief of Consumer, Research, and Communications, Consumer Price Index data indicates a 16% decline in telecom service prices in Canada over the past year. Hutton emphasized the need to continue monitoring cellphone service prices closely to prevent the January price increase from becoming a pattern.
The industry committee intends to hear from executives of Rogers and Telus in the future. NDP MP Brian Masse proposed a motion to compel the CEOs of the ‘Big 3’ to attend if they do not accept the invitation.
