BCE -MTS merger approval by Competition Bureau experiments with Manitoba consumers: price increases, more consolidation expected

OTTAWA, February 15, 2017 – The Public Interest Advocacy Centre (PIAC) and the Consumers’ Association of Canada (CAC) reacted to a consent order filed with the Competition Tribunal today by The Commissioner of Competition, BCE Inc (Bell), and Xplornet Communications Inc. (Xplornet) permitting the acquisition of Manitoba Telecom Services Inc. (MTS) by BCE, subject to certain divestitures and conditions.

“Manitoba consumers are the guinea pigs in this cellphone market experiment,” said John Lawford, Executive Director and General Counsel at PIAC. “There are no guarantees that wireless prices will not rise in Manitoba due to this deal’s approval despite the artificial creation of a tiny new competitor in Xplornet”, he added.

The Commissioner of Competition explained in a press release and statement regarding the acquisition that the “Proposed Transaction would likely lead to a substantial increase in the price for mobile wireless plans due to the increased ability and incentive for a coordinated exercise of market power between Bell, TELUS and Rogers in Manitoba.”

However, despite this finding and the rejection of Bell’s contention that the transaction should be approved due to increased “efficiencies”, the Competition Bureau stated that its concerns about competition in Manitoba were satisfied by the deal in the Consent Order. The order requires Bell to divest to Xplornet certain MTS spectrum, certain MTS customers and stores and to provide access to MTS towers among other conditions, in order for Xplornet to offer a new retail wireless retail business in Manitoba.

“We’re not quite sure what it takes to get a merger stopped in Canada anymore,” said Bruce Cran, President of the Consumers’ Association of Canada, which opposed the deal alongside PIAC. “We are particularly concerned about the possible move to more consolidation in the wireless market across Canada after this deal.”

PIAC, on behalf of the Consumers’ Association of Canada, and the Public Interest Law Centre (Manitoba), on behalf of the Manitoba branch of the Consumers’ Association of Canada, released a poll in June 2016 of Manitobans showing high levels of concern with the proposed takeover.

For more information please contact:
John Lawford

Executive Director & General Counsel

Public Interest Advocacy Centre (PIAC)

(613) 562-4002 ×25

lawford@piac.ca

http://www.piac.ca/

 

Bruce Cran

Consumers’ Association of Canada

(604) 418-8359

bcranbiz@telus.net

http://www.consumer.ca

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