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.