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Rogers to Purchase Shaw’s Wireless Spectrum as Part of $700M Deal [Update]

According to a report by the The Globe and Mail, Rogers is set to acquire Shaw’s AWS wireless spectrum in 2014 as part of a $700 million deal. The latter will also include Shaw’s Mountain Cablevision, based in Ontario.

Rogers says the agreement with Shaw is to secure an option to purchase the Calgary company’s AWS spectrum holdings in 2014, and to acquire Shaw’s cable system in Hamilton, Ont.

In exchange, Shaw will get a 33.3% stake in Rogers’ TVtropolis and will also enter talks with company to implement some services in Western Canada.

Rogers CEO Nadir Mohammed says the acquisition this particular spectrum is based in Western Canada and will help fulfill increasingly growing data usage demands. The deal is awaiting approval by Industry Canada and the Federal Competition Bureau.

Shaw initially had plans for a wireless network but ditched the idea, instead favouring to offer free Exo Wi-Fi zones instead to its customers. Shaw CEO Brad Shaw said the following in September 2011:

“We have decided to focus on strengthening our core business and leveraging our media and programming assets to support our leadership position in broadband and video,”

[…]

“Our decision not to pursue a conventional wireless business is consistent with this strategic approach and our focus on shareholder value.”

The company has reportedly saved $1 billion in start up costs by avoiding the creation of its own wireless network.

Update: The official press release notes the following purchase amounts:

  • $250 million deposit for Mountain
  • $50 million payment for the Option to purchase the spectrum holdings
  • Upon the closing of the Mountain component, total cash consideration of $400 million will have been paid in respect of this cable business
  • Rogers will receive $59 million for the sale of TVtropolis, to be received as a deposit on today’s signing of agreements

As for the unused AWS spectrum:

The acquisition of Shaw’s unused spectrum will ensure Rogers maintains its network leadership position, particularly in Western Canada where Rogers has a significant share of the wireless market. Shaw’s AWS spectrum holdings cover 188 million MHz POPs including 20 MHz across B.C., Alberta and Manitoba and 10 MHz in select B.C., Alberta, Saskatchewan and Northern Ontario markets

Founder and Editor-in-Chief of iPhoneinCanada.ca. Follow me on Twitter, and @iPhoneinCanada, and on Google+.

  • Jon

    UGH. Sale of spectrum should be handled by the feds and auctioned off 50% to big 3 and 50% to small providers. Enough of this hoarding and monopolizing of spectrum!

    In fact, scratch the above. Spectrum and bandwidth ought to be NATIONALIZED on the wholesale level. Why not let everyone have access to EVERYTHING and allow for TRUE competition by distinguishing price and features rather than accessibility and speed?

  • pure$

    Somehow I see the big 3 coming out on top after this ‘auction’ and the Canadian consumer once again getting screwed over.

  • http://www.iphoneincanada.ca Gary

    Industry Canada mandates new spectrum cannot be sold within five years of purchase, hence why this deal looks to possibly go through in 2014. Shaw paid $190 million for the spectrum and Rogers is getting a ‘deal’ over here…

  • http://twitter.com/slyrobber SlyRobber

    In the end less competition, less real investements, less monies being used to have more people working instead of greedy share holders hoarding profits in criminal tax evasion sanctuaries around the globe. Along with Nortel bosses being found not guilty of futzing around with the once giant company for their personal gain the phrase, the more I know the monied class the more I understand the guillatine is more relevant day by day hour by hour. Fall behemoth beast fall.