Home » Bell (Canada) »Canada »Competition »Consumer News »Data Caps »MTS (Manitoba) »Public Policy & Gov't »Wireless Broadband » Currently Reading:

Bell Acquires Manitoba Telecom for $3.9 Billion; Cell Phone Rates Expected to Rise

bell badBCE, Inc., the parent company of Bell Canada, has acquired Manitoba Telecom Services, Inc. (MTS), in a deal worth $3.9 billion, further enlarging Canada’s largest telecommunications company.

“Under the terms of this transaction, MTS will achieve much more than it could have as an independent company,” Manitoba Telecom president and CEO Jay Forbes said in a conference call with analysts. “BCE’s commitment to invest $1 billion over five years into Manitoba’s telecommunications infrastructure will also contribute greatly to the prosperity of our province and the quality of our customer experience.”

Many MTS customers and consumer advocates disagree with Forbes’ assessment, noting the deal will further consolidate Canada’s wireless marketplace by eliminating the province’s largest wireless carrier – MTS. The wireless business has nearly 500,000 customers – by far the largest provider in the region. Under the deal, BCE will sell off about one-third of MTS’ customers and retail storefronts to competitor Telus in a separate transaction.

Manitoba and neighboring residents in Saskatchewan pay some of the lowest prices for telecom services in Canada. MTS offers unlimited, flat rate Internet plans for both its broadband and wireless customers — plans likely to disappear or become more expensive after Bell takes over. The result, according to one Canadian telecom expert, will be higher rates.

“With MTS out of the way — and Bell and Telus sharing the same wireless network — prices are bound to increase to levels more commonly found in the rest of the country,” lawyer Michael Geist wrote on his blog.

The deal is also likely to deliver a death-blow to a government commitment assuring Canadians of at least four competing choices for wireless service. If Bell’s buyout is approved by regulators, Manitoba will be served by just three competitors — all charging substantially more than MTS.

...but soon we'll be with Bell.

…but soon we’ll be with Bell.

“Compare Bell’s wireless pricing for consumers in Manitoba and Ontario,” offered Geist. “The cost of an unlimited nationwide calling share plan in Manitoba is $50. The same plan in Ontario is $65. The difference in data costs are even larger: Bell offers 6GB for $20 in Manitoba. The same $20 will get you just 500MB in Ontario. In fact, 5GB costs $50 in Ontario, more than double the cost in Manitoba for less data. The other carriers such as Rogers and Telus also offer lower pricing in Manitoba. The reason is obvious: the presence of a fourth carrier creates more competition and lower pricing.”

That Manitoba Telecom would be up for sale at all came as a result of its controversial privatization in 2006 under a previous Conservative provincial government. The decision to privatize came despite a commitment from then-Premier Gary Filmon that Manitoba Telecom should remain a provincially-owned telecom company. Critics point to one possible reason for the flip-flop. Shortly after leaving politics, Filmon was appointed to the board of directors of the privatized company and was given $1.4 million in director fees and compensation over ten years, along with company shares with hundreds of thousands of dollars.

Economist Toby Sanger compared costs and returns of Manitoba Telecom and SaskTel, Saskatchewan’s publicly-owned telecommunications company. After two decades, the cost of a basic landline with SaskTel is $8 less per month than MTS, and SaskTel paid $497 million in corporate income taxes to the citizens of Saskatchewan – SaskTel’s shareholders – over the past five years, compared to $1.2 million paid by MTS over the same time period. In 2014, the CEO of SaskTel earned $499,492 compared to $7.8 million paid to the CEO of MTS for managing a very similar sized operation.

The acquisition will be reviewed by the Canadian Radio-television and Telecommunications Commission, the Competition Bureau and Industry Canada, and could be approved later this year or early 2017.

Search This Site:

Contributions:

Recent Comments:

  • john doe: The market is kind of saturated. Whoever wanted internet have already subscribed to Comcast/Charter. Beside this Verizon strategy is doomed to failure...
  • Coin: While its possible the connections are being throttled, I think its more likely that the cell network is overwhelmed. I live in a hurricane prone are...
  • Dylan: Just isn’t that nice? I would drop them quickly if they told me that my plan was too “low” and I needed to upgrade and pay more for better service. Wh...
  • Dan: Nice job Verizon first throttle first responders then hurricane victims. Fcc step in oh wait. Ajuit pia is worse than useless he is anti consumer....
  • LG: I didn't hear these speeches, and really don't know if what he said was incendiary or hateful, but I do know the left-wing media cannot be trusted to ...
  • Dylan: 20gigs? Abysmal. I would use that in a couple of hours. Even 50. I’m certainly fortunate to have unlimited internet with Spectrum....
  • EJ: I wonder if they are going to extend service based on demand. That system is used by many telecommunication companies that are coming into a new area ...
  • Phillip Dampier: Just to clarify, I think they are throwing in a free or discounted dish, which isn't such a big deal if you can find a promotion that does the same. I...
  • EJ: Well I guess I should of scrolled down first lol. Question answered by the Verizon article. Good job Phillip. Note to self scroll down a few articles ...
  • EJ: My question is what exactly is HughNet doing with the money? They already offer free installation in most areas so what is this money going towards? A...
  • Mark Wilkinson: This is a nightmare. Life was good until Verizon sold us to Frontier. Our service has been cut off twice for non-payment of an "non-returned equipme...
  • Don: I don't even have Greenlight available yet at my address. I am in Gates and Greenlight is taking orders for my address so I look up to see what would ...

Your Account: