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MTS CEO announces retirement

Blouin boss since 2005

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Pierre Blouin will remain as CEO of MTS Allstream until his replacement has been found.

MIKE DEAL / WINNIPEG FREE PRESS FILES Enlarge Image

Pierre Blouin will remain as CEO of MTS Allstream until his replacement has been found. Photo Store

An extensive search is underway for a new chief executive for Manitoba Telecom Services Inc. (MTS Allstream) after the company announced Tuesday longtime CEO Pierre Blouin will be retiring later this year.

Blouin, who has been CEO of the country's fourth-largest communications provider since December 2005, has agreed to remain on the job until a successor is found and an orderly transition is completed.

MTS board chairman David Leith praised the Quebec native for the "exemplary job" he has done for the company, and said the board will be considering both internal and external candidates during its search for a successor.

Blouin said in a statement he was proud of what the company had accomplished over the past decade, and he "felt this was the right time to transition to new leadership."

In the wake of Tuesday's announcement, MTS shares gained 23 cents to close the day at $30.83.

Industry analysts were divided Tuesday over whether Blouin's succcessor is likely to come from inside or outside the company.

Michael Strople, president of MTS's Allstream division, and Kelvin Shepherd, president of MTS, were mentioned as possible inside contenders. Former Allstream president Dean Provost, who left the company in January of this year, was mentioned as a possible outside candidate.

"This may be a good time to bring in someone new who has some new ideas on where to take the company," said David Heger, a telecom industry analyst with Edward Jones.

But if it does go with an outsider, Heger said it should be someone who is familiar with the Canadian industry and the regulatory challenges it faces.

Carmi Levy, another industry analyst, agreed the company could benefit from hiring another outsider. He predicted the Canadian telecom industry will continue to undergo tremendous change over the next few years, and an outsider could help guide MTS through those changes.

The MTS statement did not give any timetable for how soon the company hopes to have a successor in place and Blouin was unavailable for further comment. An MTS spokesperson said he was leaving Tuesday on a two-week vacation and would not be giving interviews and company officials would not be commenting further.

The consensus among the industry analysts interviewed on Tuesday was that Blouin would be leaving MTS in better shape than when he took over the CEO reins nearly nine years ago.

Especially given he had inherited a money-losing, high-speed national business network in Toronto-based Allstream.

"Quite frankly, Pierre has done all he could with that company (the Allstream division)," said Eamon Hoey, of Hoey Associates Management Consultants Inc.

"It's a far better company than it was 10 or 15 years ago, but it's still an albatross. It's still not a company that's widely viewed as a go-to company."

And it's still a money-loser, Hoey added.

He said one of the big challenges Blouin's successor will face is what to do with the Allstream division. MTS officials thought they'd found a solution late last year when they struck a deal to sell it to Egyptian investment group Accelero Capital Inc. for $520 million. But the federal government killed the deal on the basis of national security concerns -- a move that Hoey said dumbfounded most industry insiders and analysts.

He said the government's actions killed any hope of finding another buyer for the division, and if MTS is to continue to grow its revenues and profits, the new CEO will have no choice but to break up the division and sell off the pieces for whatever it can get.

He said another challenge facing the new CEO will be finding ways to grow company revenues and profits. He suggested one strategy might be to start acquiring telecom companies in foreign markets such as the United States or Europe.

But Heger said a better option might be to continue to expand the data-management services side of the business.

Last fall, MTS acquired Winnipeg-based IT service provider Epic Information Solutions, and in May it began building a new state-of-the-art commercial-data centre in Winnipeg. Heger said one option for growing revenues and profits would be to begin acquiring data centres in other Canadian cities.

murray.mcneill@freepress.mb.ca

Republished from the Winnipeg Free Press print edition August 13, 2014 B4

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Updated on Wednesday, August 13, 2014 at 6:42 AM CDT: Replaces photo

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