Rogers goes for a summer Seaside deal

Canadian telco Rogers Communications is once again on the M&A trail, having brokered a deal to acquire rural telecoms provider Seaside Communications.

The Seaside deal has yet to be fully worked out and neither company has shared any information on a possible purchase price. The companies said they have signed a joint agreement that ‘would’ – slightly odd choice of word there – see Rogers take over its smaller rival.

“We will work over the next little while to finalize the agreement but don’t yet have an exact timing to share,” said Seaside, in a list of FAQs on the deal. “More details will be shared soon,” it pledged.

Whatever the value of the deal – and we may never know, given that Seaside is a private company –it will be a drop in the ocean compared with the Rogers’ ongoing C$26 billion (around US$21 billion) takeover of Shaw. Rogers announced the Shaw deal back in March and is currently working through the regulatory process, with Canada’s Competition Bureau, regulator the Canadian Radio-television and Telecommunications Commission (CRTC), and government agency Innovation, Science and Economic Development Canada (ISED) all undertaking reviews amidst concerns that the transaction could have an adverse impact on competition.

Shaw is the closest thing Canada has to a fourth telecoms player to keep the big three on their toes; its business centres mainly on broadband and TV, but it also has a fairly small presence in the mobile market. What the regulators will make of the deal is tough to call at this stage, but it seems certain there will be stringent conditions added to it at the very least.

Rogers and Seaside are unlikely to face the same type of scrutiny.

Seaside does not share figures, but it’s clearly a much smaller outfit, providing TV and broadband services to rural communities across ten northeastern counties of Nova Scotia, in eastern Canada.

It makes much of its local heritage, including the fact that it is 100% locally staffed and supports community organisations, and its mission to bridge the digital divide in the areas it serves. Both Seaside and its would-be new owner are focusing on the fact that they believe the takeover will improve connectivity in rural areas, which is usually a vote-winner where regulatory bodies are concerned.

“Seaside and Rogers are committed to providing reliable high-speed broadband to more communities across Nova Scotia,” they said, in a statement. “Over the coming months, the companies will share plans to deliver the best possible services and experiences to customers, including bringing faster internet speed options and additional entertainment services such as Rogers Ignite TV.”

With the companies also pledging to retain the Seaside brand and all the company’s employees, there is little to object to in this takeover.

We’re not looking at a broader pattern of big telecoms operators hoovering up their competitors in a bid to squeeze out low-priced smaller players…or at least, not yet. There is a suggestion of that kind of behaviour with the Shaw deal, hence the intense regulatory scrutiny. But once Rogers and Seaside have ironed out the T&Cs of their arrangement, there’s a good chance it will get the nod.