Last Friday, Industry minister François-Philippe Champagne approved the transfer of Freedom Mobile’s wireless spectrum licenses to Vidéotron, the pre-conditional deal on which the two-year long Rogers-Shaw merger battle stood.
Now that the merger is cleared, albeit two expensive deadlines late, Rogers has higher hopes for its 2023 financial performance.
As the C$26 billion merger faced roadblocks from competition watchdogs, notably the CRTC and the Competition Bureau, Rogers complained about the potential losses and risks of lawsuits it would face if the merger was not cleared by the Mar. 31 closing date.
But now the telco giant has, in fact, more than doubled its guidance range from 4-7 per cent to a whopping 26-30 per cent.
The new earnings guidance is based on certain “material assumptions”, Rogers says. Here are a few:
- consistent “competitive intensity” across all its services
- wireless consumers keep upgrading to higher-value smartphones
- declining television subscribers, including the impact of customers migrating to Ignite TV from Rogers’ legacy product, amid the meteoric rise of over the top services (OTTs)
- continued investment in 5G, hybrid fibre-coaxial network and improved customer experience
- no shift in economic conditions affecting business activities or causing sports-related work stoppages or cancellations
- interest rates remain stable
- no legal or regulatory developments
While Champagne made it resoundingly clear that the merger has legal conditions with financial consequences, he made no mention of any specific regulatory or legal measure that could hurt the vision of the joined companies.
Nonetheless, Rogers currently faces a CRTC investigation initiated by independent internet service provider TekSavvy regarding the preferential rates and terms it is allegedly conferring on Vidéotron, as revealed during the Competition Tribunal’s proceedings late last year, to enable the Quebec-based carrier to emerge as a credible competitor, post merger.
But for now, Rogers, alongside Shaw and Québecor, is busy savouring its win.
“Today, we close one chapter of our story and we open another that, together with Rogers, will see more Canadians have access to higher-quality networks and expanded connectivity to rural, remote and Indigenous communities,” stated Brad Shaw, chief executive officer (CEO) of Shaw, in a joint release with Rogers.
Tony Staffieri, CEO of Rogers, added that this merger “brings together two iconic companies to deliver more value, more connectivity and more innovation for Canadians.”
Meanwhile, Québecor thanked Rogers and Shaw for their cooperation and touted the merger as a “new era for Canadians,” adding that “Vidéotron’s track record of success” and Freedom’s “highly skilled teams” will deliver a “customer-centric focus” to customers.
In August 2022, Shaw had announced the C$2.85 billion sale of its wireless carrier business Freedom Mobile to Québecor’s Vidéotron, in hopes to appease competition concerns raised by Champagne and the Competition Bureau.