Rogers to acquire Shaw

If the deal is approved, it would provide Rogers with the scale to accelerate the delivery of its nation-wide 5G network.
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Rogers Communications has reached an agreement to acquire fellow telco Shaw Communications in an effort to accelerate its 5G plans and grow its customer base in Western Canada.

The $26 billion transaction will have Rogers greatly increase its customer base in Western Canada, where Shaw is based.

According to its website, Shaw has over two million television customers, 1.9 million internet customers and 1.3 million home phone customers. The deal also includes Shaw’s discount mobile phone carrier Freedom Mobile, which has 1.9 million customers, as of November. As part of what Rogers calls a commitment to “offering affordable wireless plans, with no overage fees, that meet the budgets and needs of Canadians,” it will not increase prices for Freedom Mobile customer for at least three years.

The scale of the combined company will enable infrastructure expansion, Monday’s announcement claimed, specifically when it comes to Rogers’ plans for a nation-wide 5G network. The company said in today’s announcement that the combined entity would be able to deliver 5G service more quickly than either one could on its own.

“Western Canada is a major driver of our national economy and together we will have the scale, expertise and commitment to deliver the technology infrastructure needed to keep local communities connected, businesses competitive and attract new investment,” said Joe Natale, president and CEO of Rogers Communications, in today’s press release. “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.”

The deal is still subject to regulatory approvals from the Competition Bureau, CRTC and Ministry of Innovation, Science and Economic Development. Given the degree to which the deal would further consolidation in Canada’s telecommunications market, that might not be a simple hurdle to clear, and isn’t expected to close until the first half of 2022.

But in today’s announcement, Rogers laid out several ways in which it believes the combined company will offer “choice, competition and affordability to Canadians.”

In addition to its plans for Freedom, Rogers says the network would create new competition for Bell and Telus, specifically when it came to large enterprise and government customers, as well as offering more choice and quality of service to rural communities, which the company points out are often served by a single provider.

To that end, Rogers says it will establish a new $1 billion Rural and Indigenous Connectivity Fund targeted at helping connect rural, remote and Indigenous communities in Western Canada. It also says the expansion of 5G services will “help close the digital divide between urban and rural communities.”

Rogers expects the combination to create $1 billion in synergies within two years of the deal closing, and said it will create 3,000 “net new” jobs in Western Canada.