BCE and Rogers’ acquisition of GLENTEL

Substantial prevention of competition

There are a number of retail channels available to consumers in Canada to purchase wireless products and services, including wireless carriers’ corporate stores and multi-carrier retailers, such as GLENTEL, that offer products of two or more competing carriers.

The Bureau assessed whether the transactions would likely limit the development of future competition by preventing another carrier from being distributed through GLENTEL locations, or by generally raising barriers to entry or expansion for other wireless carriers. After examining a significant volume of company records and speaking with a wide range of market participants, the Bureau did not find evidence of likely entry that would be prevented by the transactions.

The evidence demonstrated that timely entry by another carrier into GLENTEL locations was not likely absent the transactions due to, among other things, the nature of the agreements that BCE and Rogers already have with GLENTEL, which contemplate continuation of GLENTEL’s two carrier business model with BCE and Rogers.

The Bureau found that access to real estate in some large malls can be challenging at times for wireless carriers, partly because the landlords believe that these malls already have a sufficient number of wireless retailers. However, the Bureau determined that the transactions would not significantly affect the ability of other carriers to obtain real estate in malls where GLENTEL is located or in the same local area as those malls.

The Bureau determined that the sale of wireless telecommunications products and services through GLENTEL itself is not likely a relevant antitrust market since a price increase would be constrained by consumers’ ability to purchase from other retail locations in close proximity, often in the same mall. GLENTEL accounts for a relatively small proportion of total wireless activations in Canada, with wireless carriers’ corporate stores serving as the most common location for consumers’ wireless purchases.

Coordinated effects

The Bureau has previously alleged that the wireless telecommunications industry in Canada is one in which there is pre-existing market power. The Bureau’s review considered whether competition for the retail sale of wireless products and services would be substantially lessened as a result of joint ownership of GLENTEL by BCE and Rogers.

In most of its locations, GLENTEL is a sales agent exclusively for BCE and Rogers. Based on the Bureau’s analysis, GLENTEL does not have a material influence on wireless prices. GLENTEL has no pricing discretion over carrier rate plans offered in its locations, and does not have a material influence on promotions. The timing and nature of promotions in GLENTEL are largely determined by BCE and Rogers, and this will continue post-transactions.

However, GLENTEL has and will continue to have access to the subscriber information, pricing and promotions of BCE, Rogers and other carriers for whom GLENTEL provides distribution services. The ownership of GLENTEL by BCE and Rogers could facilitate access to each other’s competitively sensitive information, as well as that of competing carriers for whom GLENTEL provides distribution services in Saskatchewan and British Columbia. The competitive effects that could arise from BCE and Rogers’ ability to access each other’s confidential information through joint ownership of GLENTEL are not limited only to consumers in GLENTEL locations. Having notice of competitors’ promotions and subscriber information through GLENTEL could affect all sales channels, and would likely give the parties the ability to substantially lessen competition, leading to consumers paying higher prices for wireless products and services.