Surprise, watchdog says some wireless plans cost more after Rogers-Shaw merger

Canada’s competition watchdog said some cellphone plans in Western Canada cost more than they did before the Rogers-Shaw merger.

According to The Canadian Press, the Competition Bureau’s senior deputy commissioner of mergers and monopolistic practices, Jeanne Pratt, told MPs on Monday that before the merger, Shaw was “a particularly growing and disruptive competitive force” that offered “very aggressive pricing for bundled wireless plans” in B.C. and Alberta.

“So far, we haven’t seen any information that would suggest that Rogers is offering comparable pricing to Shaw Mobile post-transaction, so that is of a concern,” Pratt told MPs.

Pratt testified at the House of Commons’ industry committee alongside representatives from the CRTC. MPs are investigating the accessibility and affordability of wireless and broadband services.

Rogers told the publication that it wasn’t clear which plans Pratt discussed and claimed that none of the wireless plans it currently offers in Western Canada or nationally are more expensive than before the merger with Shaw. The telecom giant said Pratt might have referred to bundled packages offered to Shaw Mobile customers, which included wireless and residential services. Rogers said it committed to freeze those prices for five years.

However, in January, Rogers raised prices for several of its customers, Fido customers, and Shaw customers. Rogers customers saw prices go up by as much as $9/mo, while Shaw internet and TV customers who weren’t on contract saw increases of around $4/mo. Bell also increased prices for customers.

Those price hikes were also the subject of discussion, with Conservative MP Rick Perkins asking Pratt whether the bureau’s warnings about reduced competition in the wake of the merger explained the hikes.

“What I can say is we were definitely concerned about the acquisition and the replacement of Shaw Mobile, who had been a vigorous and effective competitor, who seemed to be driving prices and bundled products down in Western Canada,” Pratt said.

Elsewhere, CRTC’s chief of consumer, research and communications, Scott Hutton, acknowledged that the Consumer Price Index (CPI) data shows Canadian telecom prices have declined 16 percent in the last year. However, he also noted that’s in line with international telecom price trends and that the CRTC is “certainly of the opinion that Canadians pay too much for their services.”

And, as we’ve detailed before, the CPI doesn’t paint the full picture of telecom prices. For example, many new, cheaper plan options have limited accessibility, such as limited regional availability or only being offered to new customers.

Finally, the committee invited the CEOs of Rogers, Bell and Telus to testify at an upcoming meeting, with NDP MP Brian Masse tabling a motion to summon the CEOs if they don’t accept the invitation.

Source: The Canadian Press