UPDATED: Champagne to deny ‘wholesale’ transfer of spectrum from Shaw to Rogers

Updated on March 3 at 5:46 p.m. Innovation Minister François-Philippe Champagne has indicated that his department will not allow the "wholesale transfer" of spectrum owned by Shaw Communications Inc. to Rogers Communications Inc. as part of the regulatory approval of that acquisition. In a statement Thursday afternoon, Champagne said that "many Canadians have expressed serious concerns regarding consolidation in the telecommunications sector, specifically regarding the proposed acquisition of Shaw Communications Inc. by Rogers Communications Inc. "As I have noted before, I share these concerns," Champagne said. "The wholesale transfer of Shaw’s wireless licences to Rogers is fundamentally incompatible with our government’s policies for spectrum and mobile service competition, and I will simply not permit it." In a joint statement from Rogers and Shaw Thursday evening, the companies wrote that they "continue to work constructively with the government and regulators to close this transaction and deliver the benefits of the merger to all Canadians. We share the government’s view that affordable, high-quality services should be available to every Canadian and by coming together, Rogers and Shaw will make the generational investments in networks and technology that Canada needs to create new jobs, increase competition, and bridge connectivity gaps in rural and remote areas." "We continue to expect the transaction to close in the first half of 2022," Shaw and Rogers wrote. The future of Shaw's wireless assets has been one of the most widely speculated on aspects of Rogers' bid to buy the company. As recently as last week, Quebecor Inc. CEO Pierre Karl Péladeau said he was still interested in purchasing wireless assets from Shaw, despite recent comments suggesting his company was more keen on signing mobile virtual network operator (MVNO) arrangements with incumbents in western Canada under a new framework established by the CRTC. A year ago following the announcement of Rogers' intention to buy Shaw, Péladeau told MPs at a hearing on the matter that he would only buy Shaw's Freedom Mobile assets if they came along with associated spectrum assets. "If we want competition, a strong fourth player, we need to look at transferring agreements, we need to look at transferring spectrum so that clients can have high-quality service with extremely competitive rates,” Péladeau said at the time. Early analyst reaction suggested that the announcement was not entirely shocking. In a Thursday evening note from RBC Capital Markets.analyst Drew McReynolds, he wrote that the "Minister's position is entirely consistent with our long-standing working assumption that in a Rogers-Shaw transaction scenario that Rogers would likely be required to divest some or all of Shaw's wireless assets in order to obtain full regulatory approval of the Shaw acquisition." "Given a variety of both potential remedy partners (strategic and financial) and types of remedy packages, we continue to see a high probability of Rogers successfully consummating the Shaw transaction, and currently await pending regulatory decisions (particularly from the Competition Bureau) with an eye on a mid-2022 timeframe for deal closure," McReynolds wrote.

UPDATED: Champagne to deny ‘wholesale’ transfer of spectrum from Shaw to Rogers

Brief | March 3, 2022

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UPDATED: Champagne to deny ‘wholesale’ transfer of spectrum from Shaw to Rogers

Brief | March 3, 2022

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