MTS now rings under Bell

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This article was published 17/03/2017 (3212 days ago), so information in it may no longer be current.

Manitoba’s legacy telephone and telecommunications network is now back in the hands of the company that first owned it in the 1880s.

Friday was the first official day in the life of the new Bell division called Bell MTS.

Bell’s $3.9-billion acquisition of MTS officially closed at 12:01 Friday morning.

As part of the deal, Bell has promised to embark on a $1-billion capital spend in Manitoba over the next five years and will roll out enhanced service offerings in the coming months, including what Bell boasts as Canada’s fastest-ranked wireless network and Bell’s Fibe TV service, which presumably will replace MTS TV.

Bell MTS’s Winnipeg offices will also, technically, become the headquarters for Bell’s Western Canadian operations.

Bell has tapped Dan McKeen to take over the operation with the title of vice-chairman, Bell MTS and Western Canada.

McKeen’s job up until Friday was running Bell Aliant out of Halifax, which he’s done since Bell acquired Aliant in 2014.

“We’re excited about the opportunity here,” McKeen, 55, said. “It is quite similar to the process we went through with Bell Aliant.

“There are some significant advantages in doing this — combining the scale of Bell with the local capabilities and local market knowledge and ability to execute in Atlantic Canada… it’s very much what we are looking to replicate in Bell MTS.”

McKeen, who will work out of Winnipeg from Monday to Friday and commute to his home in Halifax, said his first undertakings will be to get to know the people in the Manitoba capital, launch the Bell MTS brand and try to roll out consumer benefits.

The first indication of those consumer benefits might have been felt in Churchill, where an enhanced 4G LTE wireless service Bell MTS had previously announced went live Friday.

On Friday, Bell MTS also made its streaming television service, Crave TV, available to MTS Ultimate TV subscribers for $5.99 per month, a $2-per-month discount. (McKeen said it might take as long as a year to introduce Bell’s Fibe TV IPTV service to Manitoba consumers.)

Other than the departure of five senior managers from the executive suite, it was business as usual at the Main Street head office Friday.

Earlier this month, MTS CEO Jay Forbes publicly announced that he would be leaving the company.

Thursday was also the last day on the job for four others: Paul Beauregard, chief corporate and strategy officer and corporate secretary; Marvin Boakye, chief human resources officer; Paul Cadieux, chief financial officer; and Heather Tulk, chief customer officer.

McKeen could not say whether or not there will be any workforce reductions but he did say there will be changes.

“Similar to what happened at Bell Aliant, when you bring two companies together there are some duplication of jobs,” McKeen said. “There will be some changes, but changes both at Bell and at Bell MTS.”

Among other things, he said the process that took place in Halifax resulted in some former Aliant workers doing national Bell work out of the Halifax offices.

Bell MTS has a workforce totalling about 2,700 people.

Bob Linsdell, executive director of TEAM-IFPTE Local 161, the union that represents about 900 white-collar workers at MTS (which is down from 1,250 two years ago), said the stress level has been pretty high for the previous few months, but he remains optimistic.

“The ball is in their court. They own the company,” Linsdell said. “We are really hopeful for Manitoba that everything will continue here in Manitoba and will build.”

There are no directives or any obvious changes that are occurring immediately.

“We bought this company to grow it and to win in the marketplace. We did not buy the company to shrink it,” McKeen said.

Pricing concerns over Bell’s takeover of MTS had been a major issue among consumer advocacy groups.

The Competition Bureau made it clear consumers in regions that had four active competitors in the wireless market, as was the case in Manitoba before Bell acquisition of MTS, enjoyed the lowest rates. Bell has committed to maintain current MTS pricing for the next 12 months.

When Bell acquired Aliant there were four competitors in the marketplace. McKeen said the 12-month hold on prices was as long as the company felt comfortable with.

He said Bell has never billed itself as a low-cost provider.

“We provide the fastest wireless network in North America,” he said. “We are a quality provider. We do not shy away from that. That means we need to get paid.”

What that means when it comes to pricing in the future remains to be seen, but McKeen said ultimately the consumers will decide.

“We do not have a crystal ball to know what the future brings,” McKeen said.

In addition to changes in the corner office, to achieve regulatory approvals of the deal to acquire MTS, Bell had to agree to diminish its control of the market by way of selling about one-quarter of its wireless subscribers, about 120,000, as well as 13 MTS retail locations to Telus for $300 million.

It will also sell 24,700 wireless customers as well as wireless spectrum and six retail outlets to Xplornet.

The manner in which that process unfolds is still to be determined.

Xplornet will not take on the former MTS wireless subscribers until it builds its wireless network in Manitoba, which is expected to take at least six months.

McKeen said the Telus transaction will not take that long, but would not give any more indication as to how long it will be.

“We are very committed to making that a good experience for the customers,” McKeen said.

“We are currently working with Telus on those plans.”

Liz Sauvé, a spokeswoman for Telus, said, “We aren’t in a position to provider further detail until our deal closes with Bell, which is anticipated to happen in April.”

Greg MacDonald, an equity analyst with Macquarie Securities, said the process is likely to include some sort of random split based on average revenue per user and churn characteristics.

With the completion of the transaction, Bell MTS will have about 470,000 wireless customers, making it clearly the largest player in the Manitoba market.

Once the rearrangement of the wireless accounts gets done, estimates are that Bell MTS will have about 44 per cent of Manitoba’s wireless market, Rogers will have about 36 per cent, Telus 18 per cent and Xplornet about two per cent.

In anticipation of the deal closing, Bell announced several capital projects over the past few months, including the enhanced wireless service in Churchill, faster broadband service to the downtown Innovation Alley, as well as continuous broadband wireless coverage along both Highway 75 to the U.S. border and Highway 6 to Thompson.

The company has also announced the expansion of mobile and wireline broadband networks in Flin Flon and new wireless services for several remote locations, including Easterville, Gods Lake Narrows, Gods River, Grand Rapids and Red Sucker Lake.

Bell has completed its acquisition of all 74,398,389 MTS shares and they will officially be de-listed from the TSX as of Monday.

martin.cash@freepress.mb.ca