Rogers Defends Shaw Spectrum Deal

by Istvan Fekete on April 24, 2013

Canada’s industry minister signalled he is unhappy with Shaw Communication Inc.’s move to end its short-lived attempt to participate in the Canadian wireless market. Shaw agreed with Rogers to sell wireless spectrum acquired in 2008 to its rival Rogers Communications, a deal that has raised concern among consumer and advocacy groups, as it undermines the government’s years-long work to create a competitive wireless market in the country. Now, the Rogers CEO has spoken out and defended Canada’s No. 1 wireless player’s move to acquire that unused wireless spectrum, saying this is to the benefit of the consumer.

In 2008, Shaw acquired some of the spectrum the Conservative government had set aside for new entrants in the mobile market as part of a plan to create competition for incumbents: Rogers, Bell and Telus.

“The intent of the policy was not to have this set-aside spectrum to end (up) in the hands of incumbents,” Industry Minister Christian Paradis told reporters on a conference call when asked about Shaw’s plans.

During the Rogers annual meeting of shareholders held in Toronto yesterday — a day after announcing quarterly earnings — company CEO Nadir Mohamed said the deal would be a clear win for consumers if the federal government permits his company to acquire unused wireless spectrum from Shaw Communications Inc.
Rogers’ motivation: the growing demand for high-speed wireless services in the lucrative western market. And considering the spectrum owned by Shaw isn’t used, it could be the perfect deal for the company.

Noting that wireless data consumption is “going through the roof,” Mr. Mohamed said Rogers wants to augment its spectrum position to offer the kinds of speeds that consumers require for mobile data services. “So from that perspective, we see it actually as a win for consumers to get access,” he said, The Globe and Mail informs.

The “only” issue is the government’s policy that doesn’t allow spectrum transfer before September 2014.

This deal, however, means the competition the government fed through its rules will fade away, and the Canadian wireless market will be once again fully controlled by three big carriers, which by the way now control 94% of the market.

And the sale of the three new entrants just emphasizes the future landscape of the market. Yet how this can really be a win for the consumer is an open question. We must not forget that wireless bills have dropped thanks to the new entrants.

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Written by: Istvan Fekete. Follow by: RSS, Twitter, Facebook, or YouTube.

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Rogers Acquires Videotron’s Unused Wireless Spectrum for $180 million —
May 31, 2013 at 5:34 am

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