MONTREAL and CALGARY – Videotron is continuing to shed its wireless spectrum outside of Quebec, announcing early Tuesday that Shaw Communications has bought seven licences for $430 million.
The sale includes three 700 MHz licences covering southern Ontario and the entirety of Alberta and British Columbia, and four 2500 MHz licences covering 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. It has already received all required internal approvals at Shaw and Videotron parent company Quebecor.
Videotron said that the proceeds of the sale will allow it to go ahead with a substantial expansion and densification of its 4G network, the roll-out of its 5G network, and upgrade its Internet Protocol (IP) wireline network in Quebec and Eastern Ontario.
“Those expenditures will serve to support robust competition in the wireless and wireline markets in Quebec and Eastern Ontario”, the company said in a statement. “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.”
Shaw said that the addition of low-band spectrum is a significant milestone towards improving its network coverage and quality across Alberta, B.C. and Ontario.
"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," said CEO Brad Shaw, in that company's statement. "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."
The company added that the spectrum transaction is expected to close this summer and will be funded using a combination of cash proceeds from the sale of ViaWest, cash on hand and/or Shaw's existing credit facility.
In addition to the spectrum acquisition cost, Shaw estimated that capital expenditures associated with the deployment of the acquired spectrum will be approximately $350 million, and that it expects the majority of the capital related to the network build to be incurred during its fiscal 2018.
