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