BCE beefs up in wireless

Buys B.C.-based Glentel for its retail chains

BCE Inc.’s $594-million acquisition of Glentel Inc. will solidify the telecom giant’s retail store footprint in a competitive landscape in which carriers are keen to market their wireless products to consumers through as many avenues as possible.

Burnaby, B.C.-based Glentel sells mobile phones at 494 stores under such banners as WirelessWave, Wave Sans Fil, Tbooth Wireless and Wireless Etc. in Canada.

Glentel also operates 735 retail locations in the United States and 147 in Australia and the Philippines.

Retail storefronts have become a more popular component in the arsenal of the Big Three wireless companies as they fight for dominant market share.

“It further extends BCE’s reach into the category and it attracts consumers who may not be attracted to the Bell stores, for whatever reason,” said Doug Stephens, founder of Toronto-based advisory firm Retail Prophet. “You talk to 10 people and five of them will hate Rogers and the other five will hate Bell. If they feel they may be getting a brand-agnostic experience with a Wireless Wave or The Source, Bell can capitalize on that segment of the consumer market as well as serving them through their own stores.”

BCE made its first significant retail play in 2009 when it acquired the 700-store The Source chain (the erstwhile Radio Shack), the same year rival Telus Corp. acquired Black’s Photo Corp. and its 113 stores. Rogers Communications Inc. entered the wireless kiosk business last year with Telus through Wow! Mobile Boutique, an 81-store-and-growing chain operated by Match Marketing Group that sells wireless products and plans from Rogers, Telus, Fido, Koodo and Chatr.

In addition, mobile phones and plans are sold at stores under the Rogers, Bell and Telus banners, as well as those under the banners of smaller wireless players such as Wind Mobile, Mobilicity and Public Mobile.

Phones and plans are also available at electronics chains such as Best Buy, mass merchants such as Walmart and at many larger Loblaw Cos. stores.

Glentel’s Canadian stores currently offer wireless plans from Bell and Rogers, as well the budget brands Fido and Chatr, SaskTel and Virgin Mobile, and will continue to do so after the acquisition.

Bell said it will keep the Glentel store banners intact and will make decisions about Glentel’s international operations after the acquisition closes.

“There are clear growth opportunities ahead in Canadian wireless,” said Wade Oosterman, president of Bell Mobility.

“This includes the significantly increased number of mobile customers with two- or three-year service contracts who will be eligible to renew their plans and change carriers over the next two years, a result of the federal wireless code of conduct implemented in 2013. Bell is ready to compete for their business.”

Maher Yaghi, an analyst at Desjardins Securities, reacted favourably to the news, calling it “a defensive move that secures Bell’s long-term distribution capabilities and solidifies its important retail presence in Canada.”

Glentel shareholders can choose to receive either $26.50 in cash or 0.4974 of a BCE share for each Glentel share they hold. Including debt and a minority interest, the deal is valued at about $670 million.

The cash and stock transaction is expected to close by the end of the first quarter of 2015.