By Divya Rajagopal and David Ljunggren
TORONTO (Reuters) -The Canadian federal government and competition bureau should block Quebecor from buying Shaw Communications (NYSE:SJR)' wireless business, telecom operators Bell Inc and Telus (NYSE:TU) said in separate letters to the government and the agency, people familiar with the matter told Reuters on Thursday.
Selling Shaw's wireless business to Quebecor had been seen as a way to resolve anti-trust issues posed by Rogers (NYSE:ROG) Communications' proposed C$20 billion ($15.6 billion) purchase of Shaw. But in their letters, Bell and Telus have objected the sale on the grounds that Quebecor has a history of not using government resources such as spectrum that it has obtained.
The companies say this defeats the purpose of competition, which the government is trying to achieve through this sale of Freedom Mobile, the sources added.
A Quebecor spokesperson said the move by Bell and Telus is a ploy to thwart competition that "runs counter to the public interest and the pro-competition policy that the Government of Canada has pursued for several years," a policy the spokesperson credited for delivering lower prices in Quebec.
Last week, a federal government source told Reuters that Montreal-based Quebecor Inc is a credible buyer for the Freedom Mobile unit. A sale of the unit to a credible bidder is seen critical to help Rogers' clinch its bid for Shaw. Canada's antitrust agency has blocked Rogers' deal to buy Calgary-based Shaw on the grounds it would reduce competition in the wireless industry, in a country that already has some of the world's highest wireless rates.. It also rejected the prospective buyers presented by Rogers-Shaw to sell Freedom mobile on the grounds that the buyers will not be competitive.
Bell, Telus, the competition bureau declined to comment. Canada's Industry Ministry had no immediate comments.
Apart from the bureau, the deal requires approval from the telecommunications commission, Canada's Ministry of Innovation, Science and Economic Development.
The sources declined to be identified as the matter is not public.