On November 29, 2013, Canada's Competition Bureau (the
Bureau) issued a no-action letter in respect of the proposed
acquisition by TELUS Communications Inc. (Telus) of Public Mobile
Holdings Inc. and its operating subsidiary, Public Mobile Inc.
(Public Mobile), giving Telus the green light to acquire Public
Mobile's four spectrum licenses. The Bureau's review is
noteworthy for several reasons: First, it resulted in a remedy.
Second, the remedy is behavioural in nature. Third, there is no
"consent agreement", which is the usual way of
formalizing a remedy. And, fourth, the precise form of the
commitment made by Telus is not clear. A position statement accompanied the
In its position statement, the Bureau characterized the wireless
telecommunications industry as having high barriers to entry and
expansion, readily accessible information about competitor pricing,
and the existence of industry organizations that could facilitate
the dissemination of market and pricing information amongst
competitors, all of which are factors the Bureau states could
potentially raise concerns not only of unilateral, but coordinated
conduct. The Bureau also characterized the industy as having a high
concentration of market share, with the vast majority of wireless
subscribers served by three national incumbents (Telus, Rogers and
Bell). Following Industry Canada's 2008 spectrum auction, the Bureau states that
national incumbents responded to increased competition from new
entrants (WIND Mobile, Public Mobile, Mobilicity and Videotron
Mobile) by lowering prices, accelerating the introduction of new
products, plans and services, and expanding the overall range and
diversity of wireless products, plans and services available to
While the parties will continue to face competition from the
other national incumbents post-transaction, the Bureau focused its
analysis on the degree to which the non-incumbents were likely to
provide effective remaining competition in Southern Ontario and
Greater Montreal, where Telus' "value conscious"
Koodo brand, and Public Mobile's wireless networks overlap.
Based on its market contacts, a review of the parties' and
third parties' strategic documents and business plans
(including information on customer switching data), the Bureau
concluded that the remaining non-incumbents in Southern Ontario
(Wind Mobile and Mobilicity) and Greater Montreal (Videotron) were
likely to continue to provide effective competition
In deciding to issue the no-action letter, the Bureau also
considered Telus' commitment to offer a $19/month
"Unlimited Talk" plan on substantially the same terms as
Public Mobile's current plan until at least December 31, 2014.
Through its review, the Bureau had learned that Public Mobile
intended to discontinue the plan due to financial sustainability
issues, and was concerned the timing for the elimination of the
plan would be accelerated as a result of the proposed transaction.
Telus' commitment to retain the plan until the end of 2014
addressed the Bureau's concerns. The Bureau did not, however,
require Telus to enter into a consent agreement to formalize what
is, in effect, a behavioural remedy.
The transfer of Public Mobile's four spectrum licenses to
Telus was also subject to review by Industry Canada, which approved the licence transfer on October 23,
2013 on the grounds that the transaction would not materially
change the spectrum concentration of incumbents in Canada, and
therefore would not diminish competition in the wireless sector. As
noted in Public Mobile's Press Release, Public Mobile acquired its
spectrum licences from the open part of the spectrum auction and
not the AWS set-aside for new entrants; thereby allowing Public
Mobile to transfer its spectrum licences to Telus without any
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The Canadian Competition Bureau issued a template document for use as a form of Consent Agreement, to be filed with the Competition Tribunal to resolve concerns the Bureau may have with proposed mergers.
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