Rogers Communications has signed a 20-year deal with Videotron, the wireless arm of Quebecor (a media and cable TV company), to jointly build and operate an LTE network in Québec and the Ottawa region.
As part of the agreement, Canada’s largest mobile operator and Videotron will provide each other with services. Rogers is to receive CAD200 million ($193 million) and Videotron CAD93 million, payable over 10 years, as part of this arrangement.
Videotron also has the option of transferring its AWS spectrum licence (currently unused) in the Greater Toronto Area – subject to regulatory approvals – for CAD180 million. The licence transfer is pencilled in for 1 January 2014.
Rogers emphasised the potential for cost savings, but the operator gives no detail as to how much money might be saved from a network-sharing deal as opposed to going it alone.
Getting hold of extra spectrum is, however, a priority for Rogers. It also wants to snap up the unused spectrum licences of Shaw Communications, a dominant cable company in Western Canada, but that has to be given regulatory approval.
Videotron’s deal with Rogers should give the firm a boost by broadening its range of wireless services. Aside from Rogers, Videotron is up against the country’s other big national players – Telus and Bell Mobility – in the region where it operates.
“Quebecor, with this deal, gets a lot of tools to become more competitive,” Desjardins analyst Maher Yaghi told Reuters, adding that the tie-up could eventually lead to an even broader asset-sharing arrangement between the two companies.
Canada’s regulator is keen to promote competition but mobile entrants have generally struggled. Telus, for example – Canada’s second-biggest mobile operator – is in the process of acquiring new entrant Mobilicity for CAD380 million, picking up 250,000 customers in the process.
According to Wireless Intelligence figures, Rogers Wireless has 9.4 million subscribers, ahead of both Telus and Bell Mobility, which each have around 7.7 million.