Rogers takeover of Shaw will make it bigger but also better for all, CEO tells lawmakers

·2 min read
Rogers CEO Joe Natale said the $26-billion plan for his company to buy Shaw Communications and Freedom Mobile would enable them to focus on building a new generation of networks. (Chris Young/CP - image credit)
Rogers CEO Joe Natale said the $26-billion plan for his company to buy Shaw Communications and Freedom Mobile would enable them to focus on building a new generation of networks. (Chris Young/CP - image credit)

The chief executives of Rogers Communications Inc. and Shaw Communications Inc. told MPs today that they believe every Canadian will benefit from a combination of their two businesses, which need to be bigger to be more competitive.

Both Brad Shaw and Joe Natale argued the $26-billion plan for Rogers to buy Shaw Communications and Freedom Mobile will help Canadians by allowing the companies to concentrate on building a new generation of networks.

Critics of the proposed Rogers takeover of Shaw's cable, internet and wireless businesses argue that Canada needs more competitors in the industry, not fewer.

But Shaw testified that the Calgary-based company founded by his father isn't big enough on its own to make the billions of dollars in future investments that will be necessary for it to build a competitive 5G wireless network.

Natale also said that Toronto-based Rogers — which has Canada's largest national wireless service and one of the country's largest cable and internet business — needs to get bigger to become more competitive by growing and updating its networks.

Opposition from consumer groups and academics

The proposed deal has faced stiff opposition from consumer groups, academics, customers and others since Rogers and Shaw jointly announced their agreement two weeks ago.

Critics fear that prices will go up and service quality will go down if Rogers eliminates one of its competitors — especially Shaw's Freedom Mobile business.

Executives for Rogers and Shaw appeared in a virtual hearing of the industry, science and technology committee in Ottawa. The committee will also hear from government officials, executives from other companies and consumer advocates.

In announcing the deal on March 15, Natale said he was confident of getting regulatory and government approval by early 2022.

But Natale also said the most complex part of the approval process would involve Freedom Mobile, which is a direct competitor to Rogers and its other brands in Ontario, Alberta and British Columbia.