Sale of Freedom Mobile to Quebecor may not be enough for wireless competition

Quebecor to be the fourth big telecom player? Will Quebecor's proposed purchase of Freedom Mobile make it the fourth major cell phone carrier in Canada? The answer is a solid maybe.

Rogers Communications' decision to sell wireless provider Freedom Mobile to Quebecor-owned Videotron will only create a "weaker" competitor in the market, according to a telecom observer.

Carleton University professor Dwayne Winseck says it won't be easy for Quebec-based Videotron to expand nationally, making it less of a threat to Rogers.

Winseck notes that Videotron has had national ambitions for some time, but feels that its brand recognition is too weak and that it has not been able to strike strong deals with other national providers despite having fairly deep pockets.

Over the weekend, Rogers announced it would sell Freedom to Quebecor for $2.85 billion as it seeks regulatory approval for its $26 billion takeover of Shaw Communications. Among other things, it argued that the move would give Canadians "competition and choice."

The Competition Bureau is seeking to block the merger, fearing it would significantly reduce competition in the wireless sector, and most observers expected the sale of Freedom to be a condition of regulatory approval.

Rogers, Shaw and Quebecor say their deal would effectively address competition concerns and keep a fourth "strong and sustainable" wireless provider alive in Canada.

-- This report by The Canadian Press was first published in French on June 20, 2022.