The Canadian government has ordered a probe and asked telecom operators to develop communication protocols, after Rogers Communications suffered a network outage.
The mobile network glitch that lasted 19 hours on Friday disrupted services from flights to banking and emergency 911 calls.
The network issue also casts doubt over Rogers’ C$20 billion ($15.4 billion) deal to buy smaller rival Shaw Communications, Reuters news report said.
Canada-based payment gateway Interac said it was adding another network provider to its system after the Rogers outage left millions of Canadians locked out of online payments.
“We are adding a supplier (besides Rogers) to strengthen our existing network redundancy so Canadians can continue to rely on Interac daily,” Interac said in a statement.
Canada’s Industry Minister Francois-Philippe Champagne met the CEOs of Rogers, BCE and Telus among others on Monday in the wake of the outage.
“What I’ve demanded and expect from the telecom companies in Canada is to enter to an agreement within 60 days,” the minister told reporters.
Francois-Philippe Champagne, whose ministry has the final say on the Shaw takeover, said he will not allow wholesale transfer of licenses from Shaw to Rogers as the part of the transaction.
“It is all about affordability and competition,” Francois-Philippe Champagne said.
The three telecoms companies control about 90 percent of Canada’s telecommunications market and consumers have complained about bills that are the highest in the world. Rogers’ second outage in 15 months has led consumers and politicians to call on the government to allow more competition in the sector.
“The incident is likely to introduce incremental regulatory risk to the Shaw transaction,” BMO analyst Tim Casey said, adding that it would also raise investor concerns over Rogers’ ability to execute on deal synergies.
Friday’s disruption came two days after Rogers held talks with Canada’s antitrust authority to discuss possible remedies to its blocked takeover of Shaw. Canada’s competition bureau rejected the deal this year, saying it would hamper competition.
“We very much remain committed to the Shaw transaction,” Rogers CEO Tony Staffieri told BNN Bloomberg Television on Monday. “That transaction has always been about expanding our network capabilities, attaining more redundancy and coverage across the nation that can only help in situations like this.”
Rogers on Saturday said its services were close to fully operational and narrowed the cause to a network system failure following a maintenance update.
A research note by Scotiabank estimated Rogers would have to credit between C$65 million to C$75 million to customers in the third quarter due to the outage. The company reported a net income of C$1.56 billion in 2021.
Montreal-based law firm LPC Avocat has sought authorization to launch a class action suit against Rogers on Monday seeking C$400 compensation to each of Rogers’ customers for not providing services and making false representation about having the most reliable network.
Rogers has about 10 million wireless subscribers and 2.25 million retail internet subscribers.
Rogers CEO Tony Staffieri said previously that the company would credit all customers for the outage.
Scotiabank analysts also said increased political and regulatory risk is a possibility after the outage.
The oversight needs to balance the risk of future failures against the increased consumer/economic costs in building other parallel networks, they added.
