The head of Rogers Communications Inc. says he’s still committed to completing the $20-billion takeover of Shaw Communications Inc. despite potential increased regulatory risk for the deal following a massive network outage.

His comments came alongside a call from Innovation, Science and Industry Minister François-Philippe Champagne for telecom companies to work together and develop measures designed to safeguard against a similar disruption from happening in the future. 

“We very much remain committed to the Shaw transaction. That transaction has always been about expanding our network capabilities, obtaining more redundancy and coverage across the nation that can only help in situations like this,” said Tony Staffieri, chief executive officer of Rogers, in an interview Monday.

The outage took wireless and internet capabilities offline for hundreds of thousands of customers, disrupted businesses, and interfered with some essential services Friday. While most of the disruption was resolved by Saturday, there were still some intermittent connectivity problems as of Monday.

Staffieri said the outage was ultimately caused by a coding error in a maintenance upgrade that led to router issues.

Telecom executives, including Staffieri, met with Champagne Monday afternoon to discuss the outage and preventative measures.

Champagne said he directed the companies to come to agreements on three specific fronts: emergency roaming, mutual assistance during service outages and a communications framework to better inform the public and authorities of network disruptions.

Compensation for those affected by the outage was also discussed.

“I was very clear with the CEO of Rogers, that I expect Rogers to fully and proactively compensate their customers. We’ll be watching what they do,” Champagne said in a teleconference after the meeting.

“But I can assure you that this is the mindset that I've had, like I said, I expressed the frustration of millions of Canadians. I told them, this was unacceptable. Full stop. And with that, then I said that we need to move to how we can improve the resiliency of our network here in Canada.”

He also said the Canada Radio-television and Telecommunications Commission would be investigating the cause of the outage and provide safeguard recommendations.

Prior to the meeting, BCE Inc. Chief Executive Officer, Mirko Bibic said in an emailed statement that he was “looking forward” to speaking with Minister Champagne about the outage a “productive path forward.”

Meanwhile, an emailed statement from Telus Communications Inc. Chief Executive Officer Darren Entwistle said “we have always been a partner ready to leverage the superiority of TELUS’ world-leading networks to support Canadians, and our team is ready and willing to work with the Minister to ensure Canadians can always access the tools and services they need.”

Representatives for Quebecor Inc., and Shaw did not respond to requests for comment about the meeting.

The Shaw takeover still requires approvals from Champagne’s office and the Competition Bureau.

Staffieri said Rogers is capable of dealing with both issues – obtaining approval for the transaction and stabilizing its network – at the same time.

“A lot of work has been going, and is going, into our network stability issues. And we continue to look forward to, once we close the Shaw transaction, the opportunity to, as I said, increase network capacity and resiliency,” he said.

“But right now, [our focus] over the last few days, today, and into the next few days, is the network stability moving forward — but I don't think they're necessarily independent of each other.”

REGULATORY RISK

BMO Capital Markets Analyst Tim Casey said the outage doesn’t help Rogers’ case for the Shaw deal.

“The incident is likely to introduce incremental regulatory risk to the Shaw transaction, heightens investor concerns regarding Rogers’ ability to execute on deal synergies and counters a constructive industry narrative on network performance,” Casey wrote in a note to clients Monday.

Rogers shares underperformed its telecom peers and traded more than four per cent lower as of mid-Monday.

Casey estimated the company will take a $70-million hit to revenue in its third quarter from customer credits, and that the company faces higher customer retention and acquisition costs in the second half of the year.

“We're going to do the right thing as we work with customers in terms of those credits, and that financial impact is going to be what it's going to be,” Staffieri said.