Competition Bureau won’t challenge Shaw’s $1.6 billion acquisition of Wind Mobile

Ian Hardy

February 4, 2016 7:38pm

In December, Shaw Communications announced plans to purchase Wind Mobile for $1.6 billion CAD. The transaction is expected to close the first half of 2016, pending regulatory approval from both the Competition Bureau and Industry Canada.

Today, the Competition Bureau stated it will not challenge the proposed transaction because it “is unlikely to result in a substantial lessening or prevention of competition because, among other reasons, the two companies do not currently compete against each other, as Shaw does not own wireless assets.”

According to the Bureau, “as a result of the proposed transaction, Shaw Communications will replace WIND Mobile as a competitor to the three national mobile wireless service providers, Bell, Rogers and Telus, in urban areas of southern and eastern Ontario, Alberta, and British Columbia.”

The Competition Bureau seems to echo words spoken last month by Brad Shaw, CEO of Shaw Communications, noting that it possibly makes sense to launch a unified Shaw Mobile brand. It’s unclear as to when or if the Wind Mobile brand will see a transition to Shaw.

Wind Mobile CEO Alek Krstajic will continue to oversee the wireless business and the executive team will also remain with Shaw. Krstajic said that “the combination of Shaw and WIND creates a wireless leader with immediate benefits for our customers and employees.”

Wind Mobile has over 940,000 wireless subscribers across Canada and plans to deploy its LTE network in later in 2016 or in early 2017.

Related: Everything you need to know about Shaw’s acquisition of Wind Mobile

  • pvanb

    What if we get Shaw Mobile that stays (“competes”) in lock-step with Bell/Rogers/Telus and Wind becomes the Virgin/Fido/Koodo equivalent?

    • yoyo ma

      Then they will fail. Not saying they won’t eventually become just as bad but for the next many years they have absolutely no choice other than to compete on price. Why else would you sign to them over the big 3? Shaw will have worse coverage, worse selection of phones, worse added features, etc…price will be one of their only advantages for many years to come.

      That and if they were smart they’d bleed rogers/bell/telus dry. They can afford to undercut as their ARPA is already so low whereas if robellus were forced to go down in pricing by any significant amount it would absolutely destroy their revenues and shareholders would kill em.

    • Victor Creed

      Your points make sense, however Shaw will in no way attack the Big 3.

    • yoyo ma

      They won’t be overly aggressive but they will have to undercut them on pricing out of necessity if they want to grow. It’s when they plateau when they’ll start milking people 😛

    • It’s Me

      exactly. And it will take years before they “plateau” at a level of customers that makes their business sustainable and for them to have a network that can attract that number of customers.

    • It’s Me

      What’s their alternative plan, just start a big bonfire with the cash they spent? Because if they don’t go after the big 3, that’s basically what they will have done.

    • pvanb

      I absolutely agree they need to start with the “budget” brand to gain subscribers (I wasn’t suggesting otherwise), but long term I can see us ending up there.

    • It’s Me

      Absolutely Unless people honestly think Shaw spent $1.6B just for fun, then they will have to be fairly aggressive in their pricing, at least in the short and medium term. Otherwise, they cannot hope to gain or keep a single customer if just go with duplicating the prices of the big 3. Their network is smaller and slower. They cannot justify the same price. And even if they had an identical network overnight, one would expect they would try to use it to actually win some customers, so again, they couldn’t charge the same as the big 3.

      Only once they gain enough customers and have a comparable network can they possibly become the big 4 and that will take years and years.

  • Ricky Bobby

    Rogers and Shaw in a current non-competitive agreement says alot about our “Competition” Bureau

    • hardy83

      Like most government regulators, they merely follow acts, laws and rules dictated to them by the federal/provincial government.

      If you want to call them, or the CRTC or other regulators useless, then take a step beyond and call politicians and their laws useless.

    • ToniCipriani

      The laws are useful alright, just not for us that is. It’s highly effective for their corporate buddies to maintain their profiteering ring.

  • vn33

    My fear is the Big Three will become the Big Four 🙁

    • Victor Creed

      There is no doubt about it. Better odds winning the lotto, as opposed to it not happening.

    • OptimusOBrien

      If by the luck of the gods Wind does unlimited LTE at a decent price it will pay off 10 times over but we all know..the Big 4 is happening weather we like it or not

  • Omar

    “is unlikely to result in a substantial lessening or prevention of competition because, among other reasons, the two companies do not currently compete against each other, as Shaw does not own wireless assets.”

    Nobody is concerned with Wind and Shaw competing with each other to begin with. What a stupid excuse… It prevents competition between Wind and the Big Three. The other three mock competition, rather than take part in it.

    Shaw spent a lot of money for Wind mobile. Expect Wind’s subscribers to foot that bill…

  • Omis

    Shaw will never have a network as good as the other guys. Charging the same price would be suicide.

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  • Do Do

    Canadian government protecting canadian companies not consumers…again.

  • Andrew

    This is great! Finally WIND (or probably soon to be Shaw Wireless) will have enough resources to turn themselves into a viable alternative to Bell, Rogers and Telus. More competition the better.

  • George

    Good. Perhaps shaw people have more sense than existing people at wind even don’t know how to spell LTE.
    Also hopefully shaw to clean up those useless orascom leftovers and hire some real employees.

  • hardy83

    I’ll stick with Wind with my phone, but I can EASILY see this turning bad for consumers very fast.

  • Longtin

    When will they be a 4th Major carrier in every city, province just like Rogers, Bell and Telus? Just an example if you are with wind and leave your main city you get charged roaming charges, only really worth it if you live in a metropolitan city and don’t plan on travel outside the city.

    • kkritsilas

      If/when the WInd network has more coverage, the roaming on other networks will become less of an issue. The pending deployment of VoW-iFi, will help with buildng penetration, and make up for coverage out west, piggybacking off of the existing Shaw Go Wi-Fi hot spots that are all over some cities (Calgary, for one).