Rogers says no decision yet on Shaw spectrum deal

Rogers Communications Inc. says the federal government has not yet informed it of a decision on whether it can buy wireless spectrum from Shaw Communications Inc. A report on the news website Cartt Thursday cited anonymous sources as saying that Industry Canada officials have notified both Rogers and Shaw that the transfer of 20 MHz of AWS spectrum across British Columbia, Alberta and Manitoba, plus another 10 MHz in select areas of B.C., Alberta, Saskatchewan and northern Ontario, was not likely to be approved. The proposed spectrum transfer was part of a multi-pronged deal announced in January 2013, worth $700 million, that also included Rogers taking over Shaw's Mountain Cablevision operation in Hamilton, and Shaw acquiring full ownership of specialty channel TVtropolis by taking over Rogers' one-third share. Rogers, at the time, said the Mountain Cablevision transaction alone was worth $400 million, and that it paid $50 million up front on the option to buy the spectrum from Shaw. In an emailed statement Thursday, Rogers spokeswoman Patricia Trott said: "The article was not correct. We await the government’s decision; we don’t know what the decision will be." She did confirm that an application to Industry Canada was filed in September. The five-year moratorium on the sale of set-aside spectrum bought in the 2008 AWS auction by Shaw expired on Sept. 1. The government, however, has maintained the right to approve or deny spectrum transfers beyond these moratorium dates. Telus Corp., for example, has been denied the right to purchase Mobilicity and its spectrum, despite its moratorium on selling AWS spectrum expiring on Feb. 10 this year. A Federal Court hearing this month saw Telus arguing against the government's right to hold up spectrum transfers beyond specified moratoriums. Jake Enwright, press secretary for Industry Minister James Moore, would not confirm or deny whether the spectrum transfer from Shaw to Rogers had been denied. "We'll make a decision on any application in due course and we'll follow the usual process that we usually do," he said in a phone interview. "In the past when these things have been announced, the government has made that known." Greg MacDonald, a telecommunications analyst with Macquarie Capital Markets, said in a phone interview that, regardless of the current status of the Rogers-Shaw spectrum-transfer application, "there's almost a zero per cent that this deal will be allowed, and that's given the comments the government has made over the last year-and-a-half, that they don't want to see a greater concentration of spectrum in the hands of the incumbents." MacDonald said whether the spectrum deal goes forward is not, in itself, material from an investor's point of view. However, if it does not get approved, it signals that the emergence of a fourth competitive national player in the wireless market is more likely, which is a material consideration for telecom market analysts. "A fourth carrier not only could end up taking share, which would have an impact on the operating outlook for the incumbents, but it could end up affecting the pricing the scenarios in the market," he said. "In other words, you could end up seeing more aggressive pricing in the market, and frankly what we've seen in Canada, over the last year certainly, is a relatively rational pricing environment." Wind Mobile chairman Anthony Lacavera told The Wire Report in an exclusive interview this week that he remains open to working with other carriers, such as Mobilicity and Quebecor Inc., in creating a strong national competitor to Rogers, Telus and BCE Inc. Also, new documents related to Mobilicity’s bankruptcy-protection case indicate it has held talks with “several parties” in recent months regarding a sale, merger or partnership. Rogers also has a deal with Quebecor on the option to purchase 10 MHz of AWS spectrum in Toronto for $180 million, an arrangement that was announced in May 2013. Quebecor's moratorium on AWS spectrum expired last December. Rogers' Trott said the onus is on Quebecor to exercise its option on this spectrum, which it has not done so yet. As a result, no application to the government has been made to transfer the spectrum. Quebecor did not respond to a request for comment. — With reporting by Derek Abma at dabma@thewirereport.ca and editing by Anja Karadeglija at akarad@thewirereport.ca

Rogers says no decision yet on Shaw spectrum deal

News | November 27, 2014

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Rogers says no decision yet on Shaw spectrum deal

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