Canada’s Rogers Communications acquires Mobilicity

Canadian telecommunications giant Rogers Communications will acquire smaller rival Mobilicity for approximately $440 million, and also Shaw Communications' unused AWS-1 spectrum for $100 million to boost the speed and quality of its services in British Columbia, Alberta and Southern Ontario.

As part of the deal, Rogers will also sell some spectrum to Wind Mobile, one of the leading challengers to the country's big-three mobile operators Rogers, Telus and BCE's Bell.

The transactions mean Rogers gains significant, previously unused spectrum capacity that works with all LTE devices today.

Vaughan, Ontario-based Mobilicity is a wireless carrier operating in five urban markets of Toronto, Ottawa, Calgary,

Edmonton and Vancouver. It has over 157,000 customers.

The company came under bankruptcy protection in 2013. As of 31 May  the book value of Mobilicity's assets valued at roughly $318 million.

Creditors of Mobilicity approved the $440-million deal with Rogers. An Ontario court which supervises Mobility's bankruptcy proceedings has also approved the transactions.

Industry Canada, the government body which oversees radio-television and telecommunications in the country, has approved the transactions, which is expected to bring continuity of service and certainty to Mobilicity customers.

Further, the purchase is subject to approval by the competition bureau and the court.

Guy Laurence, President and CEO, Rogers Communications

President and CEO of Rogers Communications Guy Laurence said in a statement, ''We're basically adding multiple lanes on our wireless highway in three key markets overnight. This means faster speeds and better quality for our customers as they use more and more mobile video.''

"The transaction with Rogers provides the best possible outcome for Mobilicity's customers, dealers and employees," said Anthony Booth, president of Mobilicity.

"Rogers ensures certainty of service for Mobilicity customers, provides a great network, national coverage and high quality products and services,'' he added.

The purchase of AWS-1 spectrum (1710-1755 MHz and 2110-2155 MHz) from Shaw will help Rogers to meet growing mobile and video demands.

"We're pleased to have worked with the government to put this unused valuable resource to work. 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," Laurence said.

The $440 million purchase price is offset by tax losses valued at approximately $175 million which Rogers will acquire, according to the statement.

Toronto, Ontario-based Rogers is a diversified Canadian communications and media company. It is the country's largest wireless operator with approximately 8.6 million customers, and also the country's largest cable television services provider with around 2.3 million subscribers.

Earlier this month, Rogers and also Telus, which had earlier made attempts to buy Mobilicity, submitted their final bids to acquire the company, primarily for its wireless spectrum. 

Rogers emerged the winner agreeing to Industry Canada's requirement of some of Mobilicity's AWS spectrum to be given to former competitor Wind Mobile.

Further to the acquisition, Rogers and Wind will undertake an AWS-1 spectrum swap in Southern Ontario and sell some spectrum to Wind in BC, Alberta, Saskatchewan, Manitoba and Northern and Eastern Ontario.

In a separate statement, Wind said the Rogers-Mobilicity deal will significantly enhance the performance of its wireless services, as it receives new spectrum previously held by Mobilicity and Shaw Communications.

Wind's CEO Alek Krstajic said: "This new spectrum acquisition means Wind Mobile now has a 20 megahertz AWS-1 corridor from Victoria to Ottawa. This will significantly improve our network performance from Ontario to the Pacific, enabling us to deploy new technology and accelerate the development of our LTE network and other services.''