Ted Rogers is Not Happy
Craig McCaw caused a stir last week when Bell Canada agreed to kick US$100-million into his wireless broadband venture - a.ka. Clearwire. Part of the deal will see Bell buy into a McCaw-controlled holding company that owns 50% of Inukshuk Internet, which plans to roll out wireless broadband in Canada. It was a surprising move because the other half of Inukshuk is owned by Rogers Communications, which will soon go head-to-head with Bell in television, wireless, high-speed Internet access and telephony. Rogers CEO Ted Rogers clearly is not happy with McCaw, who apparently didn't have the courtesy to call Mr. Rogers before the Bell transaction was unveiled. While Mr. Rogers was diplomatic during an interview last week, if you read between the lines, there is no doubt he's pissed Bell was invited to the Inukshuk party. I mean, Rogers probably saw Inukshuk as a way to gain an edge in a market where everyone will eventually sell the same services. With Bell having an indirect ownership stake in Inukshuk, Rogers may have a partner it doesn't want. My take is Mr. Rogers' lawyers are combing through the Inukshuk agreeement, which originally involved Microcell Telecommunications, Allstream Inc. and McCaw, to see determine what the fine print says. Most important is Mr. Rogers' contention his company has the right of first refusal “directly or indirectly” on NR's stake in Inukshuk. Mr. Rogers may make it clear to McCaw any more transactions between McCaw and Bell will be scrutinuzed carefully. I would not be surprised to see Rogers threaten or pursue legal against McCaw to get Bell out of Inukshuk or ensure Bell's role will be marginal. Neither Bell or Rogers wants to see two wireless broadband networks built. It could be a situation where they are playing a high stakes games of chicken. Bell could be betting Rogers looks at the cost of developing Inukshuk and decides it needs a partner to help finance it.
