Recent financial analysis suggests that the future owner of Shaw Communications’ wireless properties will have to spend up to $1.5 billion by 2025 if it wants to thrive in Canada’s wireless market.
Shaw is currently in talks to be purchased by Rogers, a deal which has corporations and consumer advocates alike questioning whether the proposed merger could significantly and harmfully reduce competition in the Canadian telecom landscape. As a result, the acquisition is currently under review by Canada’s Competition Bureau.
The Globe and Mail reports that some analysts believe Rogers might be permitted to complete the purchase if it divests itself of Shaw’s wireless properties: Freedom Mobile and Shaw Mobile.
However, the article quotes Scotiabank analyst Jeff Fan warning that if the company that ends up with Shaw’s wireless properties wants to remain competitive, it will need to invest anywhere between $300 million to $1.5 billion, in addition to covering “Shaw’s usual network spending of about $300 million a year.”
The reasoning given is that Canada’s big three telecommunications providers — Bell, Rogers, and Telus — are increasingly difficult to catch up with, with each pouring billions into setting up 5G networks and purchasing wireless licenses.
A number of parties other than Rogers have been piqued by Shaw’s potentially up-for-grabs wireless businesses. For example, Quebecor-owned company Vidéotron recently bought $830 million worth of wireless spectrum, largely in provinces outside of Quebec, and has flagged its interest in purchasing Shaw’s wireless properties.
Meanwhile, Bell had attempted to acquire Shaw Communications as a whole back in March 2021, but was ultimately outbid by Rogers.
Source: The Globe and Mail