Rogers Shakes Up Tradition with $7 Billion Asset Sale
In its latest third-quarter earnings report, Rogers announced a strategic shift: it plans to sell a portion of its network assets for $7 billion. The segment, known as the “backhaul,” links cell towers to Rogers’ main network and ensures connectivity. Proceeds from the sale will be used to reduce the debt accumulated from Rogers’ recent $20 billion acquisition of Shaw. Following this announcement, industry analysts speculate that Bell and Telus might consider similar sales.
Traditionally, Canada’s “Big 3” telecom companies—Rogers, Bell, and Telus—have prioritized owning all network equipment to guarantee service quality. But Rogers is now breaking with tradition, following the path of U.S. and European telecoms that have long been divesting physical assets to lease them back.
Rogers CEO Tony Staffieri described the financing arrangement as “the first of its kind in Canada.” In the U.S., major players like T-Mobile made the shift to leased equipment years ago, allowing for a more agile capital strategy.
This move also highlights the often-overlooked value of telecom infrastructure. Scotiabank analyst Maher Yaghi suggests that the deal could prompt Bell and Telus to consider asset sales as a way to manage debt without needing one another’s consent, despite their shared network agreement.
Globally, telecom companies have raised billions by selling infrastructure like cell towers to investors eager for digital economy exposure—particularly pension funds and infrastructure-focused investors. Rogers, however, intends to retain operational control of its backhaul to manage customer experience. Yet if this part of the network appreciates significantly, buying it back may come at a premium.
With Rogers taking the first step, speculation is high that Bell and Telus may follow suit, potentially aligning with the usual patterns among Canada’s telecom giants.
As of October 31, 2024, sources informed The Globe and Mail that New York-based Blackstone is in advanced discussions to acquire Rogers’ backhaul assets. Rogers had invited multiple asset managers, including Apollo, Brookfield, and KKR, to bid. Blackstone’s terms reportedly lead the pack, although Apollo may still raise its offer. Rogers aims to finalize the deal by year-end, with sources noting that no regulatory approval is expected to be required for the transaction.
