The operators are positioning the move as a way to boost Canada’s 5G rollout
Yesterday, Rogers Communications agreed to buy its rival, Shaw Communications, for around $21 billion including debt. The deal would see the Canadian telecoms market reduced from four major players to three, with both companies suggesting that their combination would allow the resulting business to rollout 5G at a much accelerated pace.
“As part of the transaction, the combined company will invest C$2.5 billion in 5G networks over the next five years across Western Canada, which will enhance competitiveness, offer consumers and businesses more choice and improved services, help close the digital divide between urban and rural communities, and deliver significant long-term benefits for businesses and consumers,” said the operators in a joint statement.
In addition to the C$2.5 billion dedicated to the rollout of 5G, the deal also includes a promise of C$1 billion to connect rural and indigenous communities to high speed internet, an element crucial to boosting Canada’s economy, according to president and CEO of Rogers Joe Natale.
“We’re at a critical inflection point where generational investments are needed to make Canada-wide 5G a reality. 5G is about nation-building; it’s vital to boosting productivity and will help close the connectivity gap faster in rural, remote and Indigenous communities,” said Natale. “Fundamentally, this combination of two great companies will create more jobs and investment in Western Canada, connect more people and businesses, deliver best-in-class-services and infrastructure across the nation, and provide increased competition and choice for Canadian consumers and businesses,”
Overall, the deal is expected to generate around C$1 billion in synergies as well as generating around 3,000 jobs in Western provinces.
As always, the deal is subject to regulatory approval, with critics suggesting that the move would harm competition and lead to less choice for the consumer. Rogers and Shaw, naturally, disagree, arguing that it will be good for customers due to the accelerated 5G rollout, additional commitments to covering underserved areas, and the generation of additional jobs. Based on Natale’s language above, it seems clear that Rogers is well aware of the boxes that the regulator will need ticked for this deal to go ahead, and may well be prepared to jump through additional hoops as necessary.
“We’re committed to getting this transaction done. This transaction does not get that without regulatory approval. It’s our responsibility to make that happen,” said Natale.
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