Rogers acquires South Ontario fibre optic provider
Communications giant Rogers made a deal to buy the fibre optic network of Atria Networks LP for $425 million. Atria is the fibre optic provider for over 1,000 small and medium-sized businesses from Ottawa to Toronto and the Kitchener-Waterloo region.
By purchasing Atria, Rogers gains an extensive list of 1,100 existing business clients, with the obvious potential to gain many more.
At the same time, it will also keep the assets out of the hands of its rivals – particularly, as Canaccord Genuity analyst Dvai Ghose notes, the wireless new entrants that may be seeking to expand beyond wireless cellphone service and into other telecom services.
“Rogers' consumer business is maturing over time,” said Greg MacDonald, a telecom analyst with National Bank Financial Inc. “In addition, cost of capital is at record low levels for Rogers so it makes sense that the company would look to expand in the small, medium business segment via acquisition.”
We all know that fibre optics are the best way to transmit large amounts of data quickly, so could there be a better fibre optic network to own than the one serving this tech company-rich region of South Ontario?
Telus has been plugging their fibre optic television service for consumers pretty heavily lately — could this acquisition put Rogers in a position to challenge them? At the very least, this gives Rogers something to build on and expand, which may be necessary in the future as mobile phones continues to consume more and more of Rogers’ bandwidth.
