MONTREAL – Videotron (TSX:QBR.B) and Rogers Communications (TSX:RCI.B) have reached a deal that gives the Quebec company the option to sell its Toronto spectrum licence to Rogers for $180 million.
The agreement came as the two companies announced a deal to pool their efforts to build and operate a shared high-speed wireless LTE network in Quebec and Ottawa.
Under the overall agreement, Rogers and Videotron, a subsidiary of Quebecor Media, will provide each other with services for which Rogers will receive $200 million and Videotron $93 million, payable over a period of 10 years.
“This agreement will benefit businesses and consumers and is part of Rogers focused, strategic game plan,” Rogers president and chief executive Nadir Mohamed said in a statement. “This network and spectrum sharing agreement, combined with the expansion of our LTE footprint, will allow even more consumers to experience the superior connectivity and incredibly fast speeds that LTE delivers.”
The option agreement will allow Videotron to sell its Toronto spectrum licences to Rogers beginning Jan. 1, 2014. The government-issued licences provide rights to use specific radiowave frequencies used by wireless networks use to carry traffic.
The network expansion will help allow Videotron expand its offerings of handsets.
“This agreement will enable us to go farther and to do it faster and is indicative of our determination to anticipate our customers’ needs and to maintain the close relationship we have built with them.” Quebecor president and chief executive Robert Depatie said.