LETHBRIDGE, ALTA. -- Rogers Communications announced it was buying Calgary-based Shaw Communications on Monday and it’s a proposed deal that has worried some Canadian consumers.
It's a deal that will be worth $26 billion if approved by shareholders and federal regulators.
As part of the transaction, the companies said Rogers will invest $2.5 billion in 5G networks over the next five years across Western Canada.
Rogers also said it will create a new $1 billion fund dedicated to connecting rural, remote and Indigenous communities across Western Canada to high-speed Internet service.
“If this proposal is approved, we would hold Rogers to those commitments, as they would be good news for Alberta’s economy,” said Premier Jason Kenney.
Professor Robert Schulz at the Haskayne School of Business at the University of Calgary said he believed the blockbuster deal could lead to more competition on the market rather than less.
“What’s going to happen is the Shaw family is going to end up with a lot of capital,” he said.
They’re going to run a family office and they’re probably going to invest in other deals, which will put more money into smaller and midsized companies rather than have all their equity tied up in Shaw.”
Schulz said it is still too early to determine whether cellphone bills and cable prices will increase if the deal is approved.
“I can see some movement here in terms of more aggressive pricing by Bell, TELUS and Rogers because all the Shaw customers are going to be in play,” he said.
Currently, Canada’s major players in the telecom sector are Bell (BCE), TELUS, Rogers and Shaw.
Schulz believes the deal will succeed as Rogers has not made its mark in western Canada.
“The place for loopholes that might come is if the concentration of customers between Rogers and Shaw is too high,” said Schulz.
“But Rogers is not the number one player in Alberta. So if it were, then that would be an issue.”
With files from The Canadian Press
