Rogers snaps up Hamilton's Mountain Cablevision from Shaw
'Our intent would be to have them join Rogers,' CEO says of the Hamilton property's employees
Media juggernaut Rogers Communications Inc. is expanding its wireless and cable TV footprints with deals to buy Hamilton-based Mountain Cablevision Ltd., as well as unused network spectrum of Shaw Communications Inc.
Rogers said Monday that under the $700-million agreement with Shaw it secures an option to purchase the Calgary company's AWS spectrum holdings in 2014 and acquires Mountain Cablevision, currently a Shaw property. The deal requires regulatory approval.
"When you look at this transaction it builds on wireless and cable, our core businesses, right on strategy," chief executive Nadir Mohamed said in an interview.
Calgary-based Shaw, in turn, will acquire Rogers' one-third interest in TVtropolis and will enter negotiations with Rogers to provide certain services in Western Canada.
Rogers said Shaw's wireless spectrum, radio waves over which wireless networks operate, goes from British Columbia to Northern Ontario and will meet the data usage demands of its smartphone, computer and tablet customers.
"Wireless data is just exploding hundreds of per cent per year in terms of usage," Mohamed said in an interview from Toronto.
Shaw's unused spectrum was purchased for $190 million in the federal AWS spectrum auction in 2008. Shaw had planned to launch a wireless business, but dropped those plans a couple of years ago.
Mohamed said Shaw's unused spectrum will be deployed as part of Rogers' next generation Long-Term Evolution (LTE) network. LTE networks are suited to data use and allow very fast downloads.
He wouldn't say if the acquisition of Shaw's spectrum would change Rogers' strategy to bid on 700 megahertz spectrum, up for grabs in the next spectrum auction expected later this year. This spectrum is considered ideal for the deployment of LTE in high-density urban areas and in rural Canada.
"Obviously, we can't get into that strategy from both a regulatory point of view and a competitive point of view," Mohamed said.
Rogers is Canada's largest wireless provider, with more than nine million customers.
The purchase of Shaw's wireless spectrum will need approval from Industry Canada and the Federal Competition Bureau. The spectrum held by Shaw can't be sold for five years under the 2008 auction rules, which set aside spectrum for new competitors to enter the wireless business, which would mean regulatory approval in late 2014.
With the acquisition of Mountain Cablevision, Rogers also will be able to offer wireless and cable bundles to those customers, Mohamed said.
Rogers said it will get more than 40,000 cable TV customers under the deal and 130 Mountain Cablevision employees.
"Our intent would be to have them join Rogers," Mohamed said of the Mountain Cablevision employees.
Rogers, Bell and Telus are Canada's three main wireless providers. As a result of the 2008 spectrum auction, Wind Mobile, Public Mobile, Mobilicity and Quebecor's Videotron have entered the wireless business, providing more choice for cellphone users.
Rogers' wireless division represents about 65 per cent of its business, cable about 25 per cent and media 10 per cent, Mohamed said.
The Toronto-based company has assets that include cable, Internet and broadcast TV assets like Citytv and Sportsnet. Rogers also owns the Toronto Blue Jays baseball team and their stadium, the Rogers Centre, as well as a major stake in Maple Leaf Sports and Entertainment, which owns the Toronto Maple Leafs NHL team, basketball's Toronto Raptors and Toronto FC soccer. It also owns a slate of print magazines including Maclean's and Chatelaine.