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Canada approves the most significant agreement in the history of the country’s telecommunications sector

    The most significant deal in the history of Canada’s telecommunications sector looks set to come to fruition: Rogers Communications’ tentative purchase of Shaw Communications Corporation for 26 billion Canadian dollars ($19 billion) has received approval from Ottawa. This is reported by the Canadian edition of

    The deal’s approval means that the last regulatory hurdle has been cleared, just over two years after it arose.

    At the same time, Canadian Minister of Industry Francois-Philippe Champagne took a tough stance, promising to “be a hawk in protecting the interests of Canadians” in order to ensure compliance with the conditions he outlined, aimed at increasing competition and reducing costs for telephony and Internet access services.

    Champagne has approved the transfer of wireless licenses from Shaw’s Freedom Mobile to Quebecor’s Videotron, which operates in Quebec and some border regions of Ontario.

    In June 2022, Rogers and Shaw agreed to sell Freedom Mobile to Videotron for 2.85 billion Canadian dollars (2.1 billion US dollars) in an attempt to alleviate competitive concerns raised by the original offer.

    Rogers has announced a tentative agreement to buy Shaw in March 2021, with the deal deadline repeatedly pushed back. On Friday, the three companies said they plan to complete the operation by April 7.

    Champagne noted that the government in Ottawa has recorded 21 legal commitments from Rogers and Videotron to “really cut prices.”

    The terms also call for Rogers to open a second headquarters in Calgary and create 3,000 new jobs in western Canada “in the coming months” that it must maintain for at least ten years.

    Videotron must offer tariff plans that are 20% cheaper than those offered by its competitors. And spend 150 million Canadian dollars (111 million US dollars) over the next two years to upgrade the Freedom Mobile network. It is also restricted from transferring any Freedom Mobile license for ten years.

    If Rogers violates these terms, it will have to pay up to 1 billion Canadian dollars (740 million US dollars) in compensation, the minister said. If Videotron fails to meet its obligations, it could potentially face a fine of 200 million Canadian dollars (147 million US dollars).

    Let’s add that tariffs for cellular communications in Canada are among the most expensive in the world.