Freedom Mobile sales hurt by merger uncertainty, dealer says

Service and sales improved when Shaw Communications Inc. bought Wind Mobile in 2016 and rebranded it as Freedom Mobile, but they went into decline over uncertainty about Shaw’s takeover by Rogers Communications Inc. Sudeep Verma, who once owned 19 Freedom shops in the Greater Toronto Area and in Ottawa, but has since closed four of them, made the comments to the Competition Tribunal Tuesday afternoon as the Tribunal looks into the Competition Bureau’s move to halt the merger. He is also on the executive of the F Branded Association, a group of Freedom retailers in Alberta and Ontario. “We saw a sea change when Shaw bought” Freedom Mobile, Verma told the tribunal. “They invested a lot of money in getting the network to be upgraded, better customer service, better quality of the networks.” Getting access to Apple Inc.’s iPhone was also a key selling point to consumers, he added. Customers at most Freedom stores, including Verma’s, lined up to purchase the hot commodity. But all that went south when the Rogers-Shaw deal was announced last year, he said. “We seem to have become less competitive,” he told government lawyer Antoine Lippé. The gap between Freedom and the Big Three’s flankers --BCE Inc.’s Virgin, Telus Corp.’s Koodo and Rogers’ Fido–has been diminishing, Verma stated. Sales have fallen and phone subsidies have dried up. The flankers have lowered their prices while Freedom has raised its. Shaw has not been forthcoming with details of what the merger means for Freedom retailers, he said. This has caused several store owners, including Verma, to go on a month-to-month lease with store landlords. This results in uncertainty for the business. Verma said the announcement of the Rogers-Shaw merger was “like a bullet in the side.” Under questioning from Shaw attorney Derek Ricci, the store owner admitted he was one of several Freedom retailers who are currently suing the mobile telecom firm. Verma did not mention that fact in his sworn statement to the Tribunal. Several Ontario retailers launched the suit; a parallel suit has been filed by Alberta store owners. The dealers are seeking a million dollars per store in compensation. Ricci pointed out that such a settlement could net Verma $14 million. Verma was critical of Freedom for pausing the rollout of 5G service in its footprint. Customers want the latest technology and retailers are hampered by Shaw’s lack of 5G. As part of the process to gain approval of the merger, Shaw has agreed to sell Freedom Mobile to Quebecor Inc.’s Videotron Ltd. Verma told Videotron lawyer Emrys Davis that members of the F Branded Association have had no meetings with the prospective owner as of yet. –Reporting by Paul Park at ppark@thewirereport.ca and editing by Jenna Cocullo at jcocullo@thewirereport.ca .

Freedom Mobile sales hurt by merger uncertainty, dealer says

News | November 9, 2022

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Freedom Mobile sales hurt by merger uncertainty, dealer says

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