Rogers Plan to Acquire Shaw’s Wireless Spectrum for $300 Million in Jeopardy

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In January 2013, Rogers announced plans to purchase Shaw’s wireless spectrum as a part of a $700 million deal.

According to a report from The Globe and Mail, Rogers’ plan to acquire the wireless spectrum may be in jeopardy. Ottawa is expected to block the sale of the unused wireless spectrum to Rogers.

The news comes after the Canadian federal government has tightened its policy on the Canadian wireless spectrum. The Canadian government is trying to push for more competition in the wireless space.

In a conference call, Shaw’s CEO Brad Shaw said:

“Well, the rules [were] pretty clear when we bought this spectrum that after five years you could transfer them to incumbents, and so we still work on that premise and we are not sort of entertaining hypothetical ideas.”

The other option for Shaw is they could contribute their block of the wireless spectrum to a fourth carrier, like Mobilicity for example.

The companies did not disclose the exact price Rogers would pay if it exercised the option but analysts have put it in the range of $300-million.

Rogers has already paid a non-refundable $50-million for the option alone and Shaw management said last year that Rogers had also made a $200-million deposit that would be repaid if the option is not exercised.

If Shaw does not have build plans for their wireless spectrum within the next five years, they will possibly lose it, as the original terms say build requirements are required within 10 years–the company is already halfway into their ownership. Do you think Ottawa should allow Rogers to purchase Shaw’s portion of the wireless spectrum? Let us know in the comments below.

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  • malygos21

    Fuck rogers, this is the best move the government could make. They need to crack down harder on the big 3.

  • ????Dennis

    Fuck that, I’m sick of the Big 3 trying to buy spectrum that was meant for other telcos to get a foot in the market. I’m glad the government is blocking this shit. Rogers and the rest are greedy fucks. Why the fuck did shaw buy it in the first place??? Just to use it as an investment and cash in on it after 5 years.

    Glad the government finally has some balls and is cock blocking this deal.

  • 1His_Nibs1

    Although the “rules” for the purchase & sale of the unused spectrum were “pretty clear” at the time I, for one, believe Shaw never intended to go forward with a wireless network & purchased this spectrum on behalf of Rogers in a backroom deal in order to circumvent the spectrum auction process & give Rogers an unfair advantage by tilting the playing field in their favour.

  • Roy

    The three major carriers have a monopoly over Canadian wireless market which is already very expensive. The unused spectrum should be used by a fourth carrier.

  • 7y13rDurd3n

    Shaw bought the spectrum knowing they could get a deal on it as a new player. They actually started down the path of building a wireless arm including hiring a VP of Wireless. IMO, they likely decided that jumping into the wireless biz was too capital intensive, abandoned the idea, canned their VP of Wireless, and decided to go the route of Shaw Go Wifi instead. I can see them going a similar route to Republic Wireless down the road.

    Having not even attempting to use the spectrum for what it was intended, IMO they should lose the spectrum and have it revert back to government for re-auction, for new players only perhaps. This is compared to Mobilicity tho who gave it a go and is now in a bankruptcy protection scenario. Their assets/spectrum should go to highest bidder in order to pay their creditors.

  • Chrome262

    they already paid them 50 mill and its not refundable? what a bunch of idiots how did they not thing they CRTC would block the sale. and if the rule says incumbents it probably has a rule that stipulates pending approval.