Freedom stronger under Shaw than Videotron, Tribunal hears

Freedom Mobile is less likely to be a strong national player under Quebecor Inc. than it was under Shaw Communications Inc. control, an economics professor told the Competition Tribunal Tuesday. Nathan Miller of Georgetown University was testifying in opposition to the merger of Shaw with Rogers Communications Inc. Miller presented a lengthy document analyzing the pros and cons of the proposed takeover and came out against it. He said Freedom was stronger when its service could be bundled with the wireline elements of Shaw in Alberta and British Columbia. Freedom also operates in Ontario, where Shaw does not have a wireline footprint. Quebecor’s Videotron subsidiary, which will house Freedom if the deal goes through, does not have wired networks outside of Quebec. When Shaw purchased Wind Mobile and rebranded it as Freedom in 2016, it took market share away from Rogers, Miller testified. “I view Shaw as an emerging and important player in the market and I view the competition between Rogers and Shaw as meaningful and playing out to the benefits of consumers,” he told Competition Bureau lawyer John Tyhurst. Freedom has been coming up as a strong fourth national carrier, he added, and was likely to continue that trend. Shaw’s history as a wireline carrier gave it a presence in the western markets that permitted it to sell across platforms and had customer recognition. Divestiture of Freedom from Shaw to Videotron is not a panacea, he stated. Miller pointed to BCE Inc.’s purchase of MTS where the telecom was forced to divest certain assets to Xplornet (now known as Xplore Inc.) Last summer Xplore announced it was halting rollout of that part of its business. The professor commented on customer lifetime value or CLV. It could be very useful to Rogers going forward. “If Rogers, for example, can offer a bundle with wireless, it’s able to protect and reduce churn on the wireline side of the business. The documents that I’ve seen indicate that that can be a substantial amount of churn improvement,” he noted. Miller was subject to a testy cross-examination from Rogers attorney Crawford Smith. Smith began by pointing out that Miller has never worked in the private sector and has not published any papers on the telecommunications industry. He has never been called upon to testify about telecom mergers until this appearance. The pair had a back-and-forth conversation about the modeling Miller used when assessing the harms caused by the proposed merger. The Freedom divestiture does not come up until the seventh portion of an eight-part report, the lawyer maintained. The morning session of the hearing heard from Stephen Howe, chief technology officer at Bell. He was cross-examined by Rogers lawyer Jonathan Lisus. Howe said he had no knowledge of Telus Corp.’s Project Fox, a lobbying effort to scuttle the suggested takeover nor did he have knowledge of Telus’ hopes to have Bell join with it in an anti-merger campaign. The CTO did concede that Bell is opposing the Rogers-Shaw deal. Howe also admitted that Bell has a significant share of the wireless market in Alberta and British Columbia despite not offering bundled services in the two provinces. Lisus suggested Bell bought Distributel in order to have a subsidiary that could offer bundles through third party internet access (TPIA) arrangements. Bell lawyer Kevin Hong objected to the question, stating it was beyond Howe’s expertise. Lisus did not pursue the matter further. Howe gave terse answers to Lisus’ questions, frequently responding with little more than a “Yes”, “No” or “That is correct”. He agreed that the proposed merger would transform the market for telecom services. “It’s going to change the market for sure,” he stated. “Every day the market changes.” Lisus moved to the topic of service outages. The industry standard is “five nines”, or service that is working 99.999 per cent of the time. This should result in no more than five minutes of outages a year. The lawyer asserted that Bell has had many outages that exceeded those ideals. Howe said he was referring to the core network, not problems caused by weather or other factors. –Reporting by Paul Park at ppark@thewirereport.ca and editing by Michael Lee-Murphy at mleemurphy@thewirereport.ca

Freedom stronger under Shaw than Videotron, Tribunal hears

News | November 16, 2022

Unlock all the Canadian telecom, broadcasting and digital media news you need.

FREE TRIAL

SUBSCRIBE

Inside The Wire Report

Information

Hill Times Publishing

Get in Touch With Us

Freedom stronger under Shaw than Videotron, Tribunal hears

News | November 16, 2022

Unlock all the Canadian telecom, broadcasting and digital media news you need.

FREE TRIAL

SUBSCRIBE

Related Stories

Quebecor seeks to review and vary Bell MVNO decision

Quebecor’s revenue, profits drop in Q3 2024

Quebecor acquires advertising business, expands ad reach in Canada

Quebecor announces two executive appointments at Videotron, Freedom

Reuse & Permissions

Inside The Wire Report

Information

Hill Times Publishing

Get in Touch With Us