June 24, 2015 / 3:40 PM / in 2 years

UPDATE 2-Rogers adds subscribers, airwaves with Mobilicity, Shaw deals

(Adds comments from Canadian government, Wind, Mobilicity; Rogers share reaction)

By Alastair Sharp

TORONTO, June 24 (Reuters) - Rogers Communications Inc scooped up a small rival and secured key airwaves through a series of deals on Wednesday that reinforced its position as Canada’s largest wireless company, while also helping No. 4 operator Wind Mobile.

Rogers shares rose 2 percent after a court approved its C$465 million ($355 million) bid to buy struggling wireless operator Mobilicity.

Rogers also said it would pay C$100 million to execute an option to buy airwaves from cable and media company Shaw Communications Inc. It had already paid C$250 million to secure the option.

Of the Shaw airwaves, Rogers will keep those in key markets but sell the rest to Wind. It will also sell all the Mobilicity airwaves to Wind.

Wind will pay C$1 each for the two sets, CEO Alek Krstajic said in an interview.

The move supports the Canadian government’s goal of assisting smaller players to spur competition, and leaves Wind as the most viable new competitor to Canada’s three big players: Rogers, BCE Inc’s Bell, and Telus Corp.

Canada had blocked previous Telus takeover offers for Mobilicity on concerns about spectrum transfers. Telus, which was involved in the latest bidding for Mobilicity, declined comment.

Ottawa’s concerns over “undue spectrum concentration” eased after recent spectrum auctions, Industry Minister James Moore said, hailing the deals as a win for consumers.

Rogers said after adjusting for working capital, it would pay C$440 million for Mobilicity, a sale that includes tax losses worth some C$175 million.

The airwaves Rogers is picking up are in some of Canada’s most populous regions: British Columbia, Alberta and southern Ontario.

Rogers CEO Guy Laurence said the company is “adding multiple lanes on our wireless highway in three key markets overnight.”

Mobilicity, under creditor protection since September 2013, said service for its roughly 150,000 customers will not be interrupted.

Its biggest creditor, Catalyst Group, helped orchestrate the deals. A source with direct knowledge of the transaction said the private equity firm profited on its investment after years of legal wrangling.

Mobilicity’s other creditors and shareholders will negotiate distribution of the proceeds starting next week, court filings showed.

The Wind deal covers airwaves in British Columbia, Alberta, Saskatchewan, Manitoba and Ontario.

Wind, Mobilicity and Shaw all bought airwaves in a 2008 auction in which bids from large players were restricted as Ottawa sought to help new entrants. Shaw later decided against building a wireless network.

$1=$1.24 Canadian Additional reporting by Allison Martell; Editing by Chizu Nomiyama, Peter Galloway and Jeffrey Hodgson

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