Proposed five-year financial plan includes accelerated 5G coverage and $1.5 billion in network investments. Rogers has also promised to keep Cogeco's headquarters in Montreal.

Jeff Baumgartner, Senior Editor

September 28, 2020

4 Min Read
Rogers pledges to plow $3B into Quebec, retain Cogeco brand

Adding to the drama centered on Montreal-based Cogeco, Rogers Communications has pledged to plow up to $3 billion to beef up infrastructure in Quebec, including an expansion of rural connectivity and accelerated deployment of 5G coverage.

Rogers' proposal, which calls on the Toronto-based operator to speed 5G coverage to 95% of Quebecers and drive more jobs to the area via the launch of a new "tech innovation hub," enters the picture amid a tense battle over Cogeco. Rogers's multi-year, multi-billion, multi-faceted proposal aims to keep an already-rebuffed bid for Cogeco alive.

Rogers teamed with Altice USA early this month on a bid to divvy up Cogeco under a $7.8 billion proposal. Under that somewhat complicated offer, Altice USA moved to acquire Cogeco and retain Cogeco's US assets (namely Atlantic Broadband) and then sell Cogeco's Canadian assets to Rogers. The Cogeco board, as well as a family-owned unit company holding 69% of the voting rights in Cogeco, have flatly rejected the offer.

Rogers has a 33% economic stake in Cogeco and represents Cogeco's largest long-term stakeholder. Market watchers believe the pressure is on Rogers to either make an all-out play for Cogeco's Canadian holdings or unload its stake.

Multi-part plan
It's clear that Rogers intends to keep after Cogeco. Here are a few of finer points of Rogers' plan:

  • To invest $3 billion in Quebec over the next five years, including $1.5 billion in network investments.

  • Ensuring 5,000 jobs in Quebec for a combined Rogers/Cogeco entity.

  • Maintaining Cogeco's headquarters in Montreal, with a Quebec president leading its business in Quebec.

  • Keeping the Cogeco brand in Quebec.

  • Continuing relationships with local suppliers and contractors.

Rogers also announced a "made-in-Quebec innovation agenda" that includes the aforementioned 5G coverage commitment, the establishment of a tech hub that would create up to 300 new tech jobs as a "Center of Excellence" in artificial intelligence, software engineering and digital technology.

Regarding rural commitments, Rogers said it would build on Cogeco's existing commitments by forging a deal with the Quebec government to reach an additional 100,000 households. Rogers also intends to upgrade Cogeco customers Rogers' next-gen connected home services, including Ignite TV, an IP-based pay-TV service that is powered by Comcast's cloud-based X1 platform.

Rogers is also proposing a set of "culture and community partnerships" that includes a new student technology scholarship program, the sponsorship of major sporting and cultural events and establishing a French language training fund for Rogers employees outside of Quebec.

As the battle over Cogeco has intensified, Rogers has also called into question how its investments in Quebec will play out long-term.

"This is really about answering some basic questions as we look out our investment into the future," Joe Natale, Rogers' president and CEO, said during a recent investor conference. "Do our plans include Cogeco territory or not? "Is [that investment] with Cogeco inside as part of a partnership here, or is it not? It's two fundamentally different decisions … It's been a question 20 years in the making."

As part of Rogers' latest proposal to invest in Quebec, Natale said: "This is about the future, and helping ensure that Quebec's ambitions around innovation, connectivity, health and education advancements are fully realized."

Rogers noted that it has invested more than $2 billion in its wireless network in Quebec and, in January, started the rollout of 5G in Montreal.

Mobile competition appears to be a sticking point in the drama surrounding Cogeco. Speaking during the same investor conference as Natale, Cogeco SVP and CFO Patrice Ouimet held that the hostile bid appears to be driven in part by Rogers' desire to keep Cogeco out of the Canadian mobile market. Cogeco is attempting to enter the wireless business in Canada under a proposed Hybrid Mobile Network Operator framework that is currently under review by the Canadian Radio-television and Telecommunications Commission (CRTC).

Rogers and Cogeco are also going tit-for-tat on broadband network investments.

Last week, Cogeco announced that, as part of a four-year commitment to invest more than $1 billion to expand its Canadian broadband network, it would invest more than $3.2 million to connect an additional 3,700-plus homes and businesses in several Quebec municipalities.

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— Jeff Baumgartner, Senior Editor, Light Reading

About the Author(s)

Jeff Baumgartner

Senior Editor, Light Reading

Jeff Baumgartner is a Senior Editor for Light Reading and is responsible for the day-to-day news coverage and analysis of the cable and video sectors. Follow him on X and LinkedIn.

Baumgartner also served as Site Editor for Light Reading Cable from 2007-2013. In between his two stints at Light Reading, he led tech coverage for Multichannel News and was a regular contributor to Broadcasting + Cable. Baumgartner was named to the 2018 class of the Cable TV Pioneers.

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