Falling prices in Canada could impact Rogers-Shaw merger
Prices for mobile and home broadband services in Canada declined last year, according to the latest government statistics.
That’s obviously good news for consumers, but it could also bode well for Rogers and Shaw, whose attempt to merge is still awaiting the green light from the government, which is still weighing up potential competition concerns.
However, ministerial comments accompanying the figures suggest competition remains an issue, so the telcos are probably not reaching for the champagne just yet. That said, one way or another the publication of the figures could well provide a springboard for a government decision on the long-running merger attempt.
Mobile prices declined by an average of 2.6% last year compared with 2021, according to the latest annual Price Comparison Study of Telecom Services. Declines were as steep as 16% for the largest data plans. On the fixed side, home Internet prices were either flat or down on the previous year, the report shows, with mid-range plans coming in 11% lower in 2022.
According to the Minister of Innovation, Science and Industry’s assessment of the data, the report also shows that regional competitors are offering prices up to 39% lower than the major national service providers.
The government also shared that Statistics Canada’s January Consumer Price Index showed that mobile service prices fell by almost 30% between 2019 and 2022.
“Despite this progress, Canadians continue to pay too much for their telecom services. More work must be done and that’s why the government continues to advance policies that prioritise competition, which in turn will drive down prices and make services more affordable for Canadians,” the ministry said. It referenced in particular a new policy directive issued to regulatory body the Canadian Radio-television and Telecommunications Commission (CRTC) on competition and affordability.
François-Philippe Champagne, Minister of Innovation, Science and Industry – who oversees Innovation, Science and Economic Development Canada (ISED) and whose job it is to say yay or nay to the Rogers-Shaw merger – picked up the same theme.
“It’s clear from this study that competition is key to further reducing prices, and our government will continue to pursue the policies necessary to increase consumer choice for telecom services across Canada,” he said.
Read into that what you will, with regard to the upcoming merger decision.
Rogers and Shaw have pushed back their own deadline for the completion of their merger a number of times, pending receipt of the relevant approvals.
They first agreed their C$26 billion deal that should see Rogers swallow up Shaw in March 2021. There were always going to be regulatory difficulties, but neither party expected to be still in limbo two years on. The pair brokered a deal to sell Shaw’s Freedom Mobile unit last summer in a bid to alleviate competition concerns, and that element of the deal still needs signing off by ISED.
They are now working towards a 31 March completion date, their previous mid-February deadline having come and gone, and continue to talk up the – in their opinion – pro-competitive benefits of the tie-up. But all still rests on whether Champagne agrees.
The telcos could do with him making a call soon, given that it’s nearly mid-March. But he has always made it clear that he will not be rushed.
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Telecom companies charging extremely high to the customers in all front. One simple example- Home broad band model rent cost roughly 10 CAD/month. Every customer charged 240 CAD over 2yrs contract terms just for rent of modem. One can buy 2 to 3 modem in the same cost. This 10 CAD Iitself 15 to 20% of total home internet bill.
Rogers is basically a criminal organization that should not be allowed to do the deal. It is the worst company on the planet whos motto for customers is “Fuck you’! Its a disgrace!!!
World’s most expensivephone plan in canada
As long as broadband is treated as a commodity rather than a necessary utility, the price will continue to controlled by the supplier. Just imagine the nightmare we would have if other utilities like electricity, natural gas and water were not regulated. When are we going to start looking at what’s best for the many rather than the few Just another example of the rich getting richer on the backs of their customers with the regulator as their partners. If poorer smaller countries can have reasonable broadband pricing, why can’t we?
Yes treat it as a utility because in Canada all utilities are charities that don’t make a nickel. Look I work for one of the big three I would love nothing better for it to be treated like a utility as the workers at Epcor and Acto etc make way more money than I do. O and when I don’t like one say Epcor and I change providers guess what Epcor is still getting paid because they laid the cable in the ground. At least right now if you switch companies for telecom the other guys aren’t still getting paid. Many think the regulated utilities are worse for pricing than when it was 100% government controlled. Regulation isn’t a silver bullet that 100% of people agree will make things better. I’m not even discussing if prices are too high or low but your idea of regulation has major flaws.
Rogers is nothing but liars and thieves. Plain and simple, Rogers is the most dispicable company in Canada. I will drop my shaw products if this merger goes through.
Want to see Canadian telecom/internet prices drop? Let U.S. telcos offer their services to Canadians…plain and simple!
SHAW is a terrible company also. I’ve been working there 20 years. All they do is mass firings at random. Make employees work as many weekends as possible and only care about profits.
Canadians are being ripped off on all fronts whether it is telecoms, utilities, transportation, food, etc. Prices in developing countries are about half compared to in Canada. Having lived overseas in several places, I enjoy similar services for at least half the price and I have the better weather to throw in as a bonus. Wake up Canadians and do something about this or make your money here and live the life elsewhere. Disclosure: telecos’ providers occasionally advertise with me.
You’re assuming US companies have any interest.