Rogers Communications and Vidéotron are teaming up to expand their LTE networks in Ottawa and parts of Quebec to save on operating and capital costs.
"The agreement we have reached will enable us and Rogers alike to make more efficient use of our spectrum, and to derive maximum benefit from our investments," said Robert Dépatie, CEO of Vidéotron and of Vidéotron's parent company Quebecor, in a press release Thursday.
"The required capital expenditures will be less than if the two companies would have built out parallel LTE access networks."
LTE, or long-term evolution, is the latest technology for carrying signals across a wireless network. It allows more data to be transferred faster and more efficiently across the same amount of radio spectrum. LTE networks, sometimes called 4G networks, can transmit data 10 times faster than 3G networks. They're about three times faster than advanced High-Speed Packet Access+ (HSPA+) networks.
To share cost of operation, deployment
Under the 20-year agreement, Rogers and Vidéotron will pool resources to build up their existing LTE networks faster than they had planned.
They will share the cost of deploying and operating the shared network, each providing services to the other, the companies said in a press release. On balance, Rogers will receive $200 million for the services while Vidéotron will get $93 million —payable over 10 years.
The new network will enable Vidéotron to offer a broader range of handsets since LTE networks cannot be accessed with handsets that are not LTE-enabled. Rogers already has several LTE devices and LTE networks in Toronto, Montreal, Vancouver, Ottawa and other cities.
The two companies have also reached a deal that will give Vidéotron the option of selling its unused AWS spectrum in the Greater Toronto Area to Rogers for $180 million. If the sale is approved by regulators, Rogers would take over the spectrum licence Jan. 1, 2014.
"This network- and spectrum-sharing agreement, combined with the expansion of our LTE footprint, will allow even more consumers to experience the superior connectivity and incredibly fast speeds that LTE delivers," said Rogers president and CEO Nadir Mohamed.
"This is excellent news for our customers and our shareholders. This agreement will enable us to go farther and to do it faster."