Canada moves to block $16 billion telecommunications merger in world’s most expensive market

Spring may have finally arrived and the snow has melted, but regulators in Canada want to implement a blockbuster meltdown on dry ice.

On Saturday, Rogers Communications and Shaw Communications, two of Canada’s major telecommunications companies, announced that the country’s Competition Bureau would sue to block their proposed $16 billion merger. If you’ve ever been a cell phone customer in Canada, you know why.

We stand guard for three

If you were asked what is the most expensive place in the world to have a mobile phone plan, you would probably never guess that it is the Great White North. . It’s true – mobile data consultancy Rewheel has repeatedly found Canada to be the world leader in smartphone bills, and by a significant margin.

Analysts and academics have pointed to a blindingly obvious reason for this: the lack of competition in telecommunications. Three companies — Rogers, Bell and Telus — account for almost 90% of Canada’s mobile phone revenues, in what critics have called an effective oligopoly. If Rogers were to acquire Shaw, a smaller competitor active in the West, regulators fear a bad situation could worsen:

  • Rewheel’s latest study, from October 2021, found that the minimum cost for a monthly 4G mobile phone plan with at least 100 gigabytes of data included was $123 in Canada. That’s miles more expensive than second-place South Africa at $90. In the United States, this figure is around $75. Having a mobile plan in Canada costs about 13 times more than in France. So much for the right of Canadians to freedom of an unhealthy and uncompetitive environment.
  • Critics allege that the effective oligopoly has not only driven up prices, but has also deterred large corporations (which engage in “probably restrictive and anti-competitive” network sharing, according to Rewheel) from spending on innovation or upgrades. Earlier this year, PricewaterhouseCoopers ranked Canada 14th among 25 countries for broadband speeds and criticized the slow rollout of 5G in Canada.

Anticipating pushback from regulators, when announcing merger plans last year, Rogers and Shaw promised to spend $2 billion on 5G networks, $800 million on rural broadband internet and 2, $3 billion to maintain existing networks – but only after the merger is complete. That wasn’t good enough, and now they’ll face the wrath of the Competition Bureau in court.

This is Love: A survey found that loading an hour of Netflix using a Canadian mobile data plan costs an average of $12.55. In Italy, not only is the weather better, but that same hour of Netflix costs… 43 cents.

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