Rogers Wireless new No. 1 with Fido buy.(Global Wireless)

Byline: DAN MEYER

Rogers Wireless Communications Inc.'s $1.1 billion agreement to acquire Microcell Telecommunications Inc., Canada's smallest wireless operator, could propel Rogers Wireless past Bell Mobility as the nation's largest wireless operator with approximately 5.1 million total subscribers.

The deal also trumps a long-standing unsolicited $800 million offer from rival Telus Corp., which was initiated in May and has been extended numerous times since. Microcell's management repeatedly encouraged its shareholders to refuse Telus' offer in an attempt to gain maximum value for the carrier, which emerged from bankruptcy protection last year.

"We believe that this transaction constitutes an attractive opportunity for our customers and shareholders alike,'' said Andre Tremblay, president and chief executive officer of Microcell, adding that the Rogers offer also had fewer conditions compared with the Telus offer and required fewer approvals from the country's competition board.

The Microcell deal was possible following a separate agreement by Rogers Wireless' parent company, Rogers Communications Inc., to buy AT&T Wireless Services Inc.'s 34-percent stake in Rogers Wireless for more than $1.3 billion.

Rogers Wireless said the deal will provide it with a stronger presence in Quebec and Ontario and will unite Canada's largest GSM-based carriers. RCI President and CEO Ted Rogers also said the deal would allow Rogers Wireless to provide a compelling competitive offering against the incumbent wireline/wireless offerings from Bell Canada and Telus.

"This transaction will position Rogers to better compete against incumbent telco wireless operators in Canada,'' Rogers said. "It also ensures a healthy, competitive marketplace and all of the associated benefits for wireless customers across Canada.''