Rogers To Buy Shaw’s Wireless Spectrum And Mountain Cablevision: It Doesn’t Get Any Bigger Than This!

by Gaurav Kheterpal on January 15, 2013

With Shaw, you never know what’s coming next. In September 2011, Shaw dropped its plans for a wireless telephone network and instead announced that it would build a cheaper Wi-Fi service. The move was completely unprecedented as once upon a time, Shaw boasted of bringing about a wireless network and entering the game current dominated by the big providers.

However, the ground reality was that along the way, new carriers thickened the stew to the point that Shaw was always going to have to produce something truly remarkable to make the splash they’re banking on. That didn’t happen and Shaw adopted a Plan-B to embrace WiFi instead.

And yesterday, Rogers and Shaw made two major announcements that would not only have huge implications on the future of both these companies, but potentially change the game in Canada’s wireless and cable segments as well. Barring any regulatory hurdles, Rogers said it would buy Hamilton-based Mountain Cablevision Limited and some wireless spectrum licenses from Canada’s Shaw Communications Inc for about C$700 million ($710 million).

Given Rogers’ supremacy in the wireless segment and Shaw’s muscle power in cable business, it would be interesting to see how Competition Bureau, Industry Canada and the CRTC assess the future of these deals.

Shaw had spent $189.5-million on wireless licences in 2008 and the cable giant was expected to bid in the auction of the 700 MHz frequency this year. . The proposed deal allows the company to acquire the spectrum holdings next year. Rogers now has the option to buy spectrum holdings in Alberta, Manitoba, Northern Ontario, British Columbia, and Saskatchewan. This includes both 10MHz and 20MHz AWS spectrum holdings. Rogers says Shaw’s unused spectrum will be deployed as part of Rogers’ next generation Long-Term Evolution (LTE) network.

In related announcements, Rogers will also acquire Shaw’s Mountain Cablevision Ltd. in Hamilton, Ont. while Shaw will acquire Rogers’ one-third interest in TVtropolis. The deal will help Rogers to bolster its cable business in southwestern Ontario, Canada’s most populous region while letting Shaw focus on Western Canada.

 

“The agreements will benefit businesses and consumers across the country and fit squarely within our focused, strategic game plan. We’re investing in spectrum to ensure our customers continue to enjoy the incredibly fast speeds and throughput they crave, while ensuring our continued network leadership. We’re also strengthening our Cable portfolio by acquiring a valuable cable business which complements our existing Ontario cable system allowing us to deliver even more value for our customers and shareholders,” said Rogers’ President and CEO Nadir Mohamed

On first impression, the deals make sense for both companies for several reasons. Over the last couple of years, the fierce rivalry between Western Canada’s biggest cable giants – Shaw Communications and Telus, has been a well-documented affair atTheTelecomBlog. However, despite a series of aggressive moves, Shaw’s cable business has been badly hurt by Telus’ aggressive growth and it’s perceived that the former is slowly but surely losing the war for Western Canada. On the other hand, Rogers’ wireless fortunes have fluctuated through out last year and the carrier needs to get its act together to maintain its position as Canada’s largest wireless carrier.

It would be interesting to see if and how the proposed deals clear the regulatory hurdles, especially after increasing speculation over the proposed Bell Astral deal.

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Written by: Gaurav Kheterpal. www.digitcom.ca. Follow TheTelecomBlog.comby:RSS,TwitterFacebook, or YouTube.

 

 

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