Canada’s Wind Mobile will emerge as a big winner from Rogers’ C$465 million ($375 million) acquisition of bankrupt Mobilicity, with the company set to accrue significant spectrum holdings as a result of the deal.
Government body Industry Canada announced a significant shake up to Canada’s spectrum landscape after it approved the sale of spectrum-rich Mobilicity yesterday.
In conjunction with its Mobilicity deal, Rogers said regulators had approved a transfer of 18 spectrum licences from Shaw Communications, as part of a deal agreed between the two companies in 2013.
Of these 18 licences, Rogers will only keep two, transferring the other 16 to Wind, and acquire some of Wind’s current spectrum as part of the transaction. Wind will also take 10 Mobilicity licences from Rogers, giving the company a total of 26 new licences. Rogers will benefit from the deal by gaining more “contiguous spectrum”, according to local reports, which gives it blocks of airwaves located in close proximity, making it easier to deliver more bandwidth and faster speeds.
In a statement, Industry Canada said: “As a new competitor, Wind Mobile will benefit greatly from this deal. In most of its key areas of service, Wind will now have enough spectrum to deploy the next generation of wireless services.”
As a result of the spectrum transfer, Wind will increase its spectrum holding in key markets across Canada, including British Columbia, Alberta and Eastern Ontario.
Rivals Rogers and Telus have both courted Mobilicity in the past, but the government has been reluctant to sell the company to Canada’s dominant market leaders.
Following its approval of Roger’ acquisition of Mobilicity, Industry Canada added “the transfers will not result in an excessive concentration of spectrum in one company’s hands, nor will they adversely affect future competition”.
Speaking to Bloomberg, Wind CEO Alek Krstajic said it decided to partner with Rogers over Telus because the former was able to give up more spectrum as part of the deal.
“Telus wasn’t willing to give up enough, Rogers was. Rogers prevailed,” he reportedly said.
Rogers has appeared to keep regulators happy by selling a chunk of the spectrum acquired to a smaller player, with Wind being integral to the government’s shifting position over Mobilicity.
Guy Laurence, president and CEO at Rogers, added: “We got the spectrum we needed, where we needed it, for our customers and this keeps Rogers in the leading competitive position across the country.”