Shaw buys spectrum from Quebecor
Wireless spectrum outside Quebec - Quebecor announces sale of 7 licences to Shaw
Quebecor today announced the sale of seven 2500 MHz and 700 MHz wireless spectrum licences outside Quebec to Shaw Communications Inc. for $430 million. The sale includes three 700 MHz licences covering southern Ontario and the entirety of the provinces of Alberta and British Columbia, and four 2500 MHz licences covering the major urban centres in those provinces, namely Toronto, Edmonton, Calgary and Vancouver.
The transaction is subject to required approvals from regulatory authorities, including the Competition Bureau and Innovation, Science and Economic Development Canada.
The asset sale will enable Videotron to continue investing in the development of its network in Quebec and Eastern Ontario. Videotron is planning a substantial expansion and densification of its 4G network, the roll-out of its 5G network and the upgrading of its Internet Protocol (IP) wireline network. Those expenditures will serve to support robust competition in the wireless and wireline markets in Quebec and Eastern Ontario. In fact, since Videotron launched its mobile telephony service, competitive forces have strengthened considerably in all markets where the company is present. This has resulted in substantial price decreases for consumers.
Quebecor recently sold their AWS-1 spectrum in the GTA to Rogers, meaning they have disposed of all their spectrum outside Quebec. (Link)
Shaw Communications Inc. Significantly Enhances Its Wireless Network Capabilities
As previously announced earlier today, Shaw Communications Inc. has entered into a series of transactions that enhance the Company's long-term growth prospects.
The transactions announced today include a share purchase agreement with GI Partners portfolio company Peak 10 Holding Corporation to sell 100% of Shaw's wholly-owned subsidiary, ViaWest, Inc. for approximately C$2.3 billion.
Concurrently, Shaw also announced that it has entered into a definitive agreement with Quebecor Media Inc. to acquire 700 MHz and 2500 MHz wireless spectrum licences for $430 million. The spectrum licences being acquired comprise the 10 MHz licences of 700 MHz spectrum in each of British Columbia, Alberta, and Southern Ontario, as well as the 20 MHz licences of 2500 MHz spectrum in each of Vancouver, Edmonton, Calgary, and Toronto.
"Considering the acquisition of WIND (now Freedom Mobile) in 2016, we now have more synergistic investment opportunities as a leading enhanced connectivity provider within our Canadian footprint," Mr. Shaw said. "We believe this incremental investment in our wireless business, particularly with the addition of the 700 MHz spectrum, will materially improve our long-term wireless customer experience, and will further enable our ability to offer converged network solutions to our customers."
Shaw expects to realize net cash proceeds from the ViaWest Transaction of approximately C$900 million after the repayment of ViaWest-related debt and estimated ViaWest Transaction expenses and taxes.
The Spectrum Transaction is subject to customary closing conditions and all necessary regulatory approvals from the Ministry of Innovation, Science and Economic Development Canada ("ISED") and under the Competition Act. The Spectrum Transaction has received all required internal approvals at Shaw and Quebecor and is not subject to approval by the shareholders of Shaw or further approval by the shareholders of Quebecor.
The Spectrum Transaction will be funded using a combination of cash proceeds from the ViaWest Transaction, cash on hand and/or Shaw's existing credit facility, and is expected to close in the Summer of 2017.
In addition to the spectrum acquisition cost, capital expenditures associated with the deployment of the acquired spectrum are estimated to be approximately $350 million. The Company expects the majority of the capital related to the network build to be incurred during fiscal 2018, which reinforces Shaw's commitment to the wireless space, and improves our long-term wireless growth prospects.
Shaw will discuss the ViaWest Transaction and the Spectrum Transaction in conjunction with our third quarter fiscal 2017 results on the previously-scheduled conference call for Wednesday June 28, 2017.
Shaw Communications Inc. Announces Acquisition of 700 MHz and 2500 MHz Wireless Spectrum Licences from Quebecor Media Inc.
Shaw Communications Inc. Announces Sale of ViaWest to Peak 10 for Approximately C$2.3 Billion
Mark Goldberg tweeted
For those who live in the Greater Toronto Area, Vancouver, Calgary, or Edmonton, this is huge news. This spectrum purchase will allow Freedom to roll out competitive LTE coverage within their current footprint in relatively short order, including backward compatibility with existing devices. Freedom still won't have the national coverage of the big 3, but this helps within their current coverage area.
Unfortunately, Videotron retained all their spectrum for Ottawa, which was already Freedom's market with the fewest spectrum holdings. I wonder if we may see an eventual network sharing agreement between Shaw and Videotron in that market, akin to Bell and Telus elsewhere. The 1700 spectrum held by Shaw in that area would be extremely valuable to Videotron, and Freedom may not have enough spectrum to compete long term there, but I don't think Shaw wants to just abandon that market given what Freedom, pre-acquisition, invested in the network buildout there.
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