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Canada’s mobile merger follows US lead

Canada may be following a discouraging U.S. precedent. A parliamentary committee wants the sale of telecom Shaw Communications to national behemoth Rogers Communications conditioned on Shaw selling Freedom Mobile, Canada’s fourth-largest wireless carrier, according to the Globe and Mail. The situation is reminiscent of the U.S. merger of Sprint and T-Mobile US, which secured approval by offloading budget carrier Boost Mobile.

From a competitive standpoint, the results south of the border are not great. Boost’s buyer, Dish Network, has bled subscribers every quarter since the deal’s closing while facing steep costs to build out a nationwide network. After years of declines, the typical cost of U.S. wireless services has stayed flat or slightly increased since 2018, the year Sprint and T-Mobile announced their union.

In Canada, a Freedom divestiture might fare better: Potential buyer Quebecor already operates a regional carrier. But there’s no guarantee it will grow into a national competitor. And Canada already faces some of the highest wireless pricing in the world. Antitrust enforcers should be wary of the U.S. path. Reuters

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