Rogers Joins Cable’s Triple Play

Canadian cable player Rogers Communications is joining its cable industry
brethren and jumping into phone service with an all-stock bid for the Call-Net Enterprises.

The deal for the Sprint Canada subsidiary carries an estimated price tag of about $267 million (or about C330 million Canadian).

One jewel in the deal: Call-Net’s 14,000 route kilometer North American transcontinental fiber optic broadband network. The assets would bring a major long haul backbone connecting major cities in Canada under the cable provider’s roof. The network also ties into all major cities and into U.S. voice and data network access and peering points.

Ted Rogers, president and CEO of Rogers Communications, said the acquisition will significantly jumpstart and expand the company’s ability to provide customers with a full suite of video, data and now voice services, all packaged in one bill. First up will be primary line telephone business to the company’s residential and business bases of wireless and cable customers.

From there, the strategy is to cross-new communications and entertainment products and a skilled and knowledgeable employee group with strengths in telephony sales and marketing.

The deal is seen adding a shot in the arm to Rogers plans to muscle into the local telephony market with its cable customers. If the deal goes through, Rogers will have bought up “significant” fiber optics assets to add to its Pan-Canadian long-haul network for data and voice traffic. It also gives it entry into some U.S. markets as a result.

Call-Net provides home phone and local business service, as well as data, long distance and wireless services to approximately about 600,000 consumers and business customers across Canada. Most of the customers live in the cable territory served by Rogers Cable.

Call-Net also said it has more than 150 central office co-location points in all of Canada’s largest markets as well as options to acquire significant CLEC assets, including extensive local fiber in eastern Canada.

“This transaction offers an opportunity to acquire a significant customer base and telecom assets that together provide network and operating cost synergies and sales opportunities, which makes the transaction attractive economically as well as strategically,” Rogers said in a statement. “This will complement our deployment of an advanced broadband IP multimedia network to support digital voice-over-cable telephony and other new voice and data services across the Rogers Cable service areas and expand the base of customers that will benefit from them.”

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