Canadian telecom conglomerate Rogers Communications has announced a multi-pronged deal with Shaw Communications that includes an option to acquire Shaw’s spectrum licenses covering portions of British Columbia, Alberta, Saskatchewan, Manitoba and northern Ontario.
The full deal also includes Shaw selling its stake in Mountain Cablevision to Rogers, while in turn acquiring Roger’s 33.3% stake in the TVtropolis General Partnership. The financial aspects of the deal will see Rogers pay just over $700 million to Shaw, including $50 million as part of the spectrum license option. Shaw noted that the final price of the spectrum licenses could be settled over the coming months.
Shaw had originally picked up 18 wireless spectrum licenses covering parts of western Canada and Ontario during Canada’s 1.7/2.1 GHz spectrum auction in 2008 for $190 million. Those licenses included 20 megahertz of spectrum per license. Shaw had initially said it planned to launch a HSPA+ network in early 2011, before pushing back those efforts until 2012 with the idea of using LTE technology.
Citing competitive concerns, Shaw in late 2011 ditched its cellular efforts all together in favor of plans to rollout wireless data services using Wi-Fi technology running across unlicensed spectrum.
“We believe that a more prudent approach for us is to provide a managed Wi-Fi network that will allow our customers to extend their Shaw services beyond the home,” the company noted at the time. “This will achieve our objectives without risking well over $1 billion in capital expenditures on a traditional wireless network build.”
Rogers is currently one of the “big 3” mobile operators in Canada, along with Telus Mobility and Bell Canada. The country’s regulatory authority, Industry Canada, has been actively trying to promote new competition in the market through auction rules limiting bidding on some licenses to new entrants. Industry Canada is looking to auction off spectrum licenses in the 700 MHz band this year, with spectrum licenses in the 2.5 GHz band scheduled to be auctioned in 2014. Regulations will apply caps for the spectrum auctions that will place a limit on “prime” spectrum to incumbent operators that is expected to reserve those licenses for new entrants into the space.
Industry Canada will also require companies that control two or more blocks of paired spectrum in the 70 MHz band to cover 90% of the country’s population with their “current high-speed coverage” within five years and 97% within seven years of being granted the licenses. The government also said it would enforce general rollout timelines to both the 700 MHz and 2.5 GHz spectrum licenses ranging between 20% and 50% population coverage within a 10-year period.
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