UPDATE 1-Rogers, Videotron extend reach with network-sharing deal

Thu May 30, 2013 3:08pm EDT
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* Deal would cut Rogers' spending, boost Videotron market share

* Spectrum portion of deal adds to pressure on Ottawa

* Shares of Videotron parent Quebecor rise more than 4 pct

By Euan Rocha and Alastair Sharp

TORONTO, May 30 (Reuters) - Rogers Communications Inc and Quebecor Inc's Videotron wireless arm plan to build and operate a shared high-speed wireless network in and around Québec, a cost-saving arrangement that is expected to stoke competition in the French-speaking Canadian province.

Rogers, the nation's largest wireless provider, now spends far more on its network than its main rivals, Telus Corp and BCE Inc's Bell unit, do on their shared network.

The pairing with Videotron, announced late on Wednesday, means Rogers will narrow that gap. The deal will also help Quebecor's Videotron arm broaden its range of wireless services and perhaps increase market share in Québec, where the three national operators already have a head start in wireless.

"Quebecor with this deal gets a lot of tools to become more competitive," said Desjardins analyst Maher Yaghi, adding that the deal could eventually lead to an even broader asset sharing arrangement between the two sides.

The 20-year network sharing deal will help the companies expand a high-speed wireless network using technology known as long-term evolution, or LTE, in Québec and the Ottawa region. The two sides will continue to compete for customers.   Continued...