Canada-based Rogers signs agreement to buy Shaw’s spectrum holdings in 2014, and others for C$700m

Canada-based Rogers signs agreement to buy Shaw’s spectrum holdings in 2014, and others for C$700m

Canada-based Rogers Communication announced that it had signed an agreement to secure Options to “purchase Shaw [Communications’] Advanced Wireless Services (AWS) spectrum holdings in 2014.” In addition, Rogers also acquired Shaw’s cable system in Hamilton, Ontario. But Shaw said it will be buying the remaining one-third percent stake from Rogers in TVtropolis, a specialty channel owned by both companies displaying iconic TV shows from back in the day.

With the potential purchase of Shaw’s AWS spectrum holdings, Rogers says it will be able to maintain its leadership position in Western Canada, where it currently has a significant share of the wireless market. Shaw says its AWS spectrum holdings cover 188 million MHz POPs including 20 MHz across British Columbia, Alberta, and Manitoba, and 10 MHz in select British Columbia, Alberta, Saskatchewan, and Northern Ontario markets.

Any purchase will have to be reviewed and approved by Industry Canada and Competition Bureau — the agency that originally held an auction for AWS spectrums in 2008. Rogers says that if approved, the earliest this transaction could go through would be 2014.

Since Shaw purchased its AWS spectrum holdings in 2008, it has reportedly struggled to enter the market. In April 2011, the company announced that it would be slow down the building of its wireless network as it considered its technology and strategy options. In January 2012, it postponed its launch until later in the year. In doing so, it has allowed other Western Canada-focused companies like Telus establish a foothold into long-term evolution (LTE) networks that many smartphone users are becoming quite used to.

Besides being owners of TVtropolis, the two companies signed a long-term distribution deal of all of Shaw Media services, including top-performing channels and on-demand rights to Global TV coverage. Signed in November 2011, this deal ensured Shaw’s programming would be available not only on-demand, but also online and on mobile devices, through linear, VOD, broadband, and mobile rights.

The deal is said to be worth C$700 million with $50 million going to Shaw as payment for the Option to purchase its spectrum holdings. Rogers says:

Final consideration for the spectrum will be payable if Rogers exercises its Option and the spectrum licenses are acquired, and will take into account the terms of the services agreement  between Rogers and Shaw. The Option will be exercisable from the date on which regulatory approvals permit such exercise and the transfer of the spectrum licenses until expiry in March 2015, subject to extension in certain circumstances. The transactions are not conditional on the closing of any other transactions and remain subject to customary conditions, including applicable regulatory approvals as referred to above.

Photo credit: John Moore/Getty Images

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