OTTAWA – BCE Inc. got the official go ahead to proceed with its $3.9 billion purchase of MTS early Wednesday after the Competition Bureau and Innovation, Science and Economic Development Canada (ISED) offered their respective blessings.
As part of the regulatory wrangling, Bell and MTS agreed to transfer 40 MHz of 700 MHz, AWS-1 and 2500 MHz wireless spectrum currently held by MTS to Xplornet Communications who will launch a new mobile wireless service in Manitoba in the coming months. In addition to picking up 24,700 new mobile customers from Bell MTS and six retail outlets in the province, Xplornet will also receive roaming access on Bell Mobility's network and certain wireless infrastructure. Financial terms of these transactions will not be disclosed, said Bell.
Bell and Telus will also proceed with plans to move approximately one-third of MTS' postpaid wireless to Telus. Telus will also assume 13 MTS retail locations for approximately $300 million, subject to final adjustments, following the completion of the Bell MTS transaction.
“Bell's deal to acquire MTS and the expansion of Xplornet into the Manitoba market will result in more competition, which means more choice and competitive prices for all Manitobans”, said ISED minister Navdeep Bains, in a statement. “Competition drives higher-quality networks and gives consumers better value for the money they spend on telecommunications services. Manitobans can also expect to see more of the latest technologies and service offerings, which will mean better and faster networks across the province.”
The Bell/MTS deal, first announced on May 2, 2016, has now received all regulatory approvals. Bell MTS is scheduled to launch on March 17, 2017.
Bell MTS to hold wireless prices for at least one year
Bell MTS reiterated its pledge to invest $1 billion over the next five years to extend the availability of Bell's Gigabit Fibe Internet, roll out Fibe TV and expand its LTE wireless network.
The deal will see Bell add approximately 710,000 new wireless, Internet and IPTV customers in Manitoba, a 5% increase in Bell's total broadband service subscribers. The merged company will have more than 470,000 total pro forma subscribers, with both Bell Mobility and Virgin Mobile customers receiving full access to the MTS network in Manitoba. Bell’s national wireline footprint also increases to 11.2 million households. Bell MTS will operate 69 retail locations offering wireless and wireline services across the province, and MTS products will also be available for the first time in Bell, The Source, Tbooth wireless and WirelessWave locations.
Bell Media's CraveTV video streaming service will be available to MTS TV customers as well as Internet subscribers, and Bell Business Markets is adding the MTS data centre in Winnipeg to its roster of 27 centres, creating the largest data hosting network in Canada.
Bell said Wednesday that it expects to capture increased annualized cost synergies of approximately $100 million from the integration of MTS, double its previous $50 million estimate. The additional savings result from reduced wireless roaming and network sharing, network backhaul and wholesale costs; increased wholesale revenue; Bell's volume-based purchasing advantages; and other operational efficiencies. BCE plans to update its 2017 financial targets when it announces its Q1 2017 results on April 26.
"Bell MTS will deliver the best broadband networks and unprecedented service innovation to Manitobans, growing competition, choice and value in communications throughout the province”, said BCE and Bell Canada president and CEO George Cope, in a statement. “In addition to our capital investments to roll out our Fibe and mobile LTE services in Manitoba, Bell MTS is also announcing today that we will maintain current MTS wireless price plans for at least 12 months after the closing of the acquisition."
Xplornet enters wireless market as a regional player
Xplornet will have access to the Bell MTS network for three years as it builds out its own LTE wireless network in Manitoba, and will offer both mobile and fixed broadband services. It also plans to acquire an incremental 30 MHz of spectrum.
"This advancement in our business is an important milestone in Xplornet's mission to connect Canadians, regardless of where they live, with fast, affordable wireless services," said Xplornet president and CEO Allison Lenehan, in a statement. "We believe there is an opportunity to provide more value to consumers in Manitoba. In the months ahead, we look forward to introducing Xplornet to new mobile customers while building on our long-standing heritage in Manitoba."
Service details and a launch date will be announced in the near future.
Telus grows its wireless share in Manitoba
Approximately one-third of MTS' postpaid wireless customers will become Telus customers once the purchase of MTS by BCE concludes. Even though the transaction is expected to close on or about April 1st, customers will be actively migrated over several months, the company said Wednesday.
As a result of a broader network sharing agreement between Telus and Bell, customers of both companies will have high quality and reliable coverage across rural Manitoba. In addition, Telus will invest in wireless technology and infrastructure in the Greater Winnipeg area and Brandon to further enhance the reliability, speed, functionality and reach of its 4G LTE network.
