TORONTO – Rogers Communications and Bragg Communications are in discussions on potential system swaps, Cartt.ca has learned.
A source with direct knowledge of the talks said late Wednesday on condition of anonymity that the two companies are negotiating a deal in which the primary assets exchanged would be Bragg’s Delta Cable and Coast Cable systems in southern B.C. (and potentially some of EastLink’s other operations in Western Canada, too) in exchange for Rogers’ systems in St. John’s, Corner Brook and Gander, Nfld.
The deal would certainly make sense for Bragg’s EastLink cableco since it owns many small systems throughout Newfoundland & Labrador already (and almost all of PEI and Nova Scotia) and the basic cable technology used at EastLink and Rogers’ Newfoundland is based on the Motorola platform, making integration relatively easy from that standpoint.
While Bragg is a private company that doesn’t release subscriber figures, we know from prior system sales that Rogers’ Newfoundland operations have approximately 80,000 customers. That’s about the same number as Delta Cable (about 38,000), Coast Cable (~14,000) and the largest Bragg Alberta system, in Grande Prairie (~25,000), combined.
Bragg’s western operations, which are still run under the Persona brand (EastLink purchased Persona in 2007), also serves 141 small communities in Alberta, 13 in B.C. (not including Delta and Coast) and 25 Manitoban small towns.
Bragg also recently sold off its systems in Saskatchewan, perhaps signalling it would like to get out of the west altogether.
Such a move for Rogers would give it a new toehold in Western Canada in a lucrative BC market (Delta) right beside Shaw Communications and could certainly be construed by observers as a swing back at Shaw, which recently purchased Hamilton Ontario’s Mountain Cablevision, which borders on Rogers territory.
Shaw has also shown its desirous of the Delta territory since, as reported by Cartt.ca, it has begun overbuilding in the region.
That purchase by Shaw, which won an auction of the system over Rogers, triggered a short-lived court battle (chronicled here by Cartt.ca) that revealed a near decade old non-compete clause where the companies appeared committed to stay out of each other’s geographic cable footprint until 2011. The CRTC approved the $300-million Mountain purchase last week, a buy which nudged Shaw past Rogers in terms of the size of their cable operations, as counted by basic subs, 2.33 million to 2.29 million.
More to come on this developing story.
– Greg O’Brien
