Bell deal for MTS gets OK

BCE will pay $3.9 bil­lion for Man­i­toba tele­com com­pany

The Peterborough Examiner - - BUSINESS - EMILY JACK­SON FI­NAN­CIAL POST

BCE Inc. re­ceived fi­nal reg­u­la­tory ap­proval for its $3.9-bil­lion ac­qui­si­tion of Man­i­toba Tele­com Ser­vices from In­no­va­tion, Sci­ence and Eco­nomic Devel­op­ment Canada and the Com­pe­ti­tion Bureau on Wed­nes­day.

Bell says the trans­ac­tion will close on March 17. The new en­tity will then launch as Bell MTS.

As a con­di­tion of the deal, Bell MTS agreed to trans­fer wire­less spec­trum, wire­less cus­tomers and six re­tail out­lets to Xplor­net Com­mu­ni­ca­tions Inc., which in­tends to launch a mo­bile ser­vice in the prov­ince. Xplor­net will also re­ceive ac­cess to the Bell MTS net­work for three years as it builds out its own net­work. The fi­nan­cials sur­round­ing this deal will re­main pri­vate.

The Com­pe­ti­tion Bureau’s in­ves­ti­ga­tion found the re­moval of MTS could re­sult in “sub­stan­tial less­en­ing or pre­vention of com­pe­ti­tion” for wire­less in Man­i­toba, lead­ing to higher prices and fewer op­tions. The di­vesti­ture to Xplor­net was re­quired to es­tab­lish a new en­trant to com­pete against the Big Three providers.

“While to­day’s con­sent agree­ment is ex­pected to ad­dress my con­cerns with the merger, we will con­tinue to keep a close watch on com­pe­ti­tion in Man­i­toba and across Canada in the mo­bile wire­less ser­vices mar­ket,” Com­mis­sioner of Com­pe­ti­tion John Pec­man said in a state­ment. “Given the find­ings of our re­view, any fu­ture po­ten­tial merg­ers by Canada’s three largest mo­bile wire­less providers, Bell, Rogers and Telus, can ex­pect to re­ceive a close ex­am­i­na­tion by the Bureau.”

Bell MTS will also divest ap­prox­i­mately one-quar­ter of MTS sub­scribers to Telus, which amounts to about $300 mil­lion, and 13 re­tail lo­ca­tions. This was part of the orig­i­nal plan sub­mit­ted to the Com­pe­ti­tion Bureau last May.

“Bell MTS will de­liver the best broad­band net­works and un­prece­dented ser­vice in­no­va­tion to Man­i­to­bans, grow­ing com­pe­ti­tion, choice and value in com­mu­ni­ca­tions through­out the prov­ince,” Bell pres­i­dent Ge­orge Cope said in a state­ment.

Cope also promised to main­tain cur­rent MTS wire­less price plan for at least a year af­ter the deal closes, ac­cord­ing to the state­ment.

Cus­tomers in Man­i­toba en­joy far lower prices than the rest of the coun­try, prompt­ing con­cerns from con­sumers ad­vo­cates that the deal would bring bill shock to res­i­dents as the num­ber of providers are re­duced to three from four.

Reg­u­la­tors were ex­pected to slap con­di­tions on the deal that en­cour­aged com­pe­ti­tion. It was widely spec­u­lated that Shaw Com­mu­ni­ca­tions Inc. would get some spec­trum for Free­dom Mo­bile.

Bell MTS plans to in­vest $1 bil­lion in the prov­ince over the next five years, in­clud­ing projects in Churchill, along High­way 75 and High­way 6.

The deal adds about 710,000 wire­less, In­ter­net and IPTV sub­scribers, a 5 per cent in­crease for Bell. It in­creases Bell’s na­tional wire­line foot­print to 11.2 mil­lion house­holds. Bell Busi­ness Mar­kets will add MTS’s data cen­tre in Win­nipeg to its net­work of 27 cen­tres.

The deal im­me­di­ately im­proves free cash flow, chief fi­nan­cial of­fi­cer Glen Le­Blanc said in a state­ment.

Bell will up­date its 2017 fi­nan­cial guid­ance when it re­leases its quar­terly re­sults on April 26. Its stock fell when it re­ported its full-year 2016 re­sults ear­lier this month on rel­a­tively lack­lus­tre growth prospects for 2017.


The head of­fice of MTS in Win­nipeg, Man. is seen in May 2016. The Man­i­toba tele­com com­pany has been sold to Bell.

Newspapers in English

Newspapers from Canada

© PressReader. All rights reserved.