As the Rogers Shaw merger moves forward, a merger in the US could help provide insight into what could happen.
The Rogers Shaw merger is continuing with the companies making a deal to supposedly spin off Freedom Mobile should the merger go ahead. There have been some bumps in the road in their quest to reduce competition in the telecom sector, so it is probably not a surprise that the deadline to complete the deal got pushed to the end of the year. Still, the threat that this deal could move ahead is a big worry for ordinary Canadians.
A big reason why the merger efforts were delayed came courtesy of the massive outage that affected Rogers customers. Large portions of the country were suddenly cut off from internet and cell phone access, large portions of the Canadian economy were knocked offline due to credit cards suddenly becoming worthless at businesses, and, most worryingly, access to 911 was completely cut off for a lot of people as well. It’s a big reason why there have been hearings after to prevent one outage from causing so much disruption from happening in the future. It led many Canadians to realize that quality of service could further deteriorate should the merger move ahead.
Of course, quality of service is only one of many things that tends to suffer when such a merger moves ahead. As many academics and experts point out, Canadians pay some of the highest cell phone rates in the developed world. The merger could very easily make this situation worse thanks to less competitors in the field. It is, after all, very hard to “vote with your wallet” when there is only one candidate running for you hard earned money.
Many of these concerns are customer side. One often less talked about angle is what happens to those working for these companies. There are thousands that depend on jobs offered by both companies. So, when a merger happens, what happens is that these companies promise either that nothing will change or that there will be an increase in jobs. Then, when the press has moved on and fewer people are paying attention, the waves of layoffs happen within the new mega company. A common excuse used by the company in question is often how the company is conducting some “restructuring” or whatever corporate speak they want to employ to suggest that this issue is no big deal. Of course, to those on the receiving end of those pink slips, it is, in fact, a big deal to them.
Interestingly enough, a few years ago, the US saw a merger also within the telecom sector. This happened between T-Mobile and Sprint. At the time, the two companies were promising to bring on board thousands of new employees and that the merger would result in an increase in the labour force. As The Verge points out, the exact opposite ended up happening after the ink dried:
In April 2020, the companies had about 80,000 workers combined; however, as the Journal points out, T-Mobile’s most recent annual report (pdf) said it ended 2021 with 75,000 full- and part-time employees.
Employees
As of December 31, 2021, we employed approximately 75,000 full-time and part-time employees, including network, retail, administrative and customer support functions.
A company spokesperson told the Journal that the layoffs “were part of continuing organizational shifts during the past few months” without exactly saying how many jobs were eliminated or if there would be more layoffs in the future.
T-Mobile said the post-merger company would employ at least 11,000 additional workers by 2024, but so far, it looks like the exact opposite is occurring. Soon after the merger, T-Mobile announced a layoff plan that would affect “hundreds” of former Sprint workers. Since then, T-Mobile has dissolved Sprint’s LTE network and switched Sprint customers over to T-Mobile as the company plans to use its wealth of PCS spectrum to broadcast cellular signals from satellites.
Meanwhile, the Dish Network Genesis 5G service that was supposed to provide new competition is still hard to find. Elsewhere in the industry, other carriers have been experiencing layoffs, too. In early August, CNET reported that T-Mobile, along with its competitor Verizon reported that they were laying off employees to accommodate business needs.
So, after laying off 5,000 employees, the shedding of jobs is set to only continue (assuming they haven’t already). Indeed, this end result is nothing new and has happened countless times in other sectors. Quite frankly, if the same thing happened after the Rogers Shaw merger, it would actually be the expected norm rather than the exception to the rule. Depending on the situation, that could mean thousands whose lives are suddenly turned upside down and with fewer opportunities to find work elsewhere. It could mean having to rebuild the resume with new skills after an additional couple of years of retraining to go into a completely different sector. That is enormously disruptive to ones life and, potentially, their families as well. That seniority gets eliminated and those employees would have to start from the ground up again.
All of this adds yet another reason why there is hope that this merger won’t go ahead. It’s seemingly destined to result in less competition, lower quality of service, higher bills, fewer job opportunities, and even waves of layoffs as well. While the Canadian regulator, the CRTC, simply refused to do its job and rubberstamped the deal, the hope is that something else within the government will actually step in and put a stop to it all. A recommendation from the Competition Bureau to block the merger certainly provides some hope for that. Still, it’s looking pretty bad that the deal might go ahead anyway. If it does, it seems like only a matter of time before history repeats itself.
(Hat tip: @KeldonB via @openmediaorg)
Drew Wilson on Twitter: @icecube85 and Facebook.
