The deal was originally expected to close by the end of July. But after the nationwide outage that took Rogers’ entire network offline on July 8, the telecommunications giant must now pay around C$150 million in compensation to its customers, as well as invest heavily to separate its wired and wireless line data traffic.
But even without the unexpected wedge thrown in by the outage, the viability of the Rogers-Shaw merger still hung in the air. While it has been approved by the Canadian Radio-television and Telecommunications Commission, Canada’s Competition Bureau is seeking to block the deal. Rogers and Shaw tried to and failed to further talks in the recent mediation with the bureau. Furthermore, the deal needs to get the green light from the Innovation, Science and Economic Development Canada (ISED), which oversees the radio spectrum licenses.
Still, Rogers and Shaw remain optimistic that they will reach an agreement. The companies have already agreed to divest Freedom Mobile, perhaps the biggest sticking point in the deal, to Quebecor for $2.85 billion. With that hurdle mostly cleared, regulators can attend to other outstanding issues in the merger.
In its Q2 financial report, Rogers posted 122,000 new mobile phone net adds, up 62,000 from last year. Its Q2 revenue was C$3.86 billion, an 8 per cent increase from the same quarter last year.
During the investment call, Rogers chief executive officer Tony Staffieri said the company is committed to increasing its network reliability. Aside from separating the wireless and wireline traffic, additional measures include better partitioning of the network, changes to network upgrade procedures, and “implementing a fail-safe method of ensuring communications for emergency and essential services work all the time, irrespective of any one carrier’s outage.”
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