The Canadian Radio-television and Telecommunications Commission will on Monday launch its first hearing into plans by Shaw Communications to sell all of its TV operations to rival Rogers Communications and to spin off its wireless business into a new entity.
The meeting, held at the Bell Centre in Montreal will also consider a proposed tax break to the cable company and will hear about the impact a reorganization would have on jobs. But while this is critical, the biggest issue facing the CRTC will be the total number of wireless carriers operating in Canada — still a problem because Shaw’s deal to join with Rogers’ is widely expected to lead to further consolidation.
“There will be many other things being reviewed, but this will be the flagship one,” said an insider with the regulator who did not want to be named.
Originally proposed in September, the swap of Shaw’s Canadian television assets to Rogers, which is Canada’s largest wireless carrier, was previously abandoned. But that deal and the creation of the new wireless entity hasn’t done any favours for Canada’s beleaguered wireless market.
Recent announcements from all three major carriers indicate that further consolidation is imminent with telecom companies scrambling to bolster their wireless spectrum holdings ahead of a government auction scheduled for early 2019.
Earlier this week, Telus Corp. announced it had secured a deal to purchase Mobilicity, formerly an all-Canadian startup but now a low-profile U.S. wireless provider, for $380 million. In September, BCE Inc. agreed to buy Wind Mobile, a major Wind rival, for $3 billion. Last month, Shaw applied for regulatory approval of its deal to join with Rogers, but noted that any agreement will take months to finalize and won’t go into effect until such a time.
It is unknown at this point whether the Shaw-Rogers deal will trigger any additional spectrum purchases, but recent acquisition announcements have indicated that the threat of further industry consolidation is real. Telus and BCE are making offers to acquire struggling smaller carriers such as Public Mobile and Mobilicity, respectively.
Despite renewed movement on the wireless side, Canada’s wireless market appears in relative disarray.
Much of the focus has been on continued price increases by Rogers. Consumer outcry led the regulator to act earlier this year, suspending price increases and giving companies more time to reflect on changes in their data plans.
The CRTC is tasked with determining which options should be considered the most cost-effective based on their impact on prices, so its role will be to consider both data plans and their impact on the bottom line.
Sprint will be a key witness at the CRTC’s hearing Monday, but no other major player, such as BCE or Telus, is expected to attend. “All of the other carriers are all unavailable,” said the CRTC insider. “That probably is a byproduct of the Shaw-Rogers deal getting some attention and attention being paid.”