BCE To Move 1/3 Of Customers To TELUS In MTS Acquisition

It looks like Canada’s wireless landscape is once again forever changing.  BCE, Canada’s largest communications company and the parent company to Bell, announced that they formed an agreement to purchase Manitoba Telecom Services (MTS) for $3.9 billion CAD - $3.1 billion in stock and $800 million of existing MTS debt.  Both BCE and MTS shareholders and Board of Directors have agreed to the terms of the deal.  As part of the deal, Bell will assign one-third of the MTS dealer locations in Manitoba to TELUS.  George Cope, President and CEO of BCE and Bell Canada said, "This transaction with TELUS enhances wireless competition to the benefit of Manitobans while reducing the cost of our acquisition of MTS." Like all things in Canada, the Bell-TELUS part of the transaction is subject to all regulatory approvals and closing conditions.  However, the adoption of the Bell-TELUS deal is not a condition that must be met for the Bell-MTS deal to go through.

To show their commitment to the Manitoba area, Bell is opening up a regional office there and calling its operations Bell MTS in recognition of MTS’ powerful brand presence.  The 2700 employees MTS has will grow Bell’s Western team to 6,900 people.  Jay Forbes, President, and CEO of MTS said, "This transaction recognizes the intrinsic value of MTS and will deliver immediate and meaningful value to MTS shareholders while offering strong benefits to MTS customers and employees, and to the province of Manitoba.  We are very proud of what the MTS team has accomplished. Now, enabled by Bell's national scale and commitment to broadband investment, Bell MTS will be very well-positioned to accelerate service innovation, customer support and community investment to the benefit of Manitobans like never before."

Bell recently put out a video claiming that your network should look like a pepperoni pizza, with towers spread around the entire pie for best coverage – it looks like Bell decided it needed more ‘pepperoni’ in Manitoba.   While Bell may be the fastest network in Canada, they also have the most complaints about poor customer service. The part of the agreement where Bell will assign one-third of the MTS stores to TELUS was done, according to Bell, to strengthen competition in Manitoba, but it could be a way to decrease competition.  It will be fascinating to see what happens to the monthly rate of the MTS customers after all of the dust settles.

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