MTS to hang up for last time

Hey there, time traveller!
This article was published 03/05/2016 (3540 days ago), so information in it may no longer be current.

The last vestiges of the old Manitoba Telephone System will disappear if BCE Inc.’s bid to buy MTS is approved by federal regulators. Despite efforts to keep up the appearance of stiff competition, the deal will actually reduce it. While some Manitobans may long for the days of good government jobs and local development, the private-sector juggernaut in telecommunications has proved to be relentless and unstoppable.

MTS president Jay Forbes said it himself when he noted Monday the deal was too good to be turned down — by shareholders. Whether the proposed sale of Manitoba Telecom Services to BCE Inc. (or Bell) for $3.9 billion is good for Manitobans in general, and customers in particular, remains to be seen.

The usual suspects have lined up with opposing opinions and facts. Unifor, the union representing telecom workers, says if history is a guide, BCE will move quickly to consolidate operations and reduce the workforce. Makes sense.

For its part, Bell says it will invest in infrastructure in Manitoba and improve service. Makes sense, too. And what about prices?

Manitoba and Saskatchewan have enjoyed some of the lowest rates in Canada because of the strong local competition provided by MTS and SaskTel. In Manitoba, those days are coming to an end, despite Bell’s decision to sell one-third of its new Manitoba holdings to Telus in an effort to retain a competitive market.

The fact is the market will be less competitive without MTS. The field will now be dominated by Bell, with Rogers and Telus in pursuit.

The federal government has wanted a more competitive wireless market for obvious reasons — better service, better pricing, better technology — but the collapse of MTS for the sake of shareholder wealth means it will have to play a more aggressive role in regulation.

Indeed, the CRTC has had to intervene repeatedly in recent years to ensure fairness and transparency in the industry. Even something as simple as a Wireless Code to make it easier for individuals and businesses to understand their contracts was necessary because the telecom giants wouldn’t do it on their own.

In other fallout from the deal, Winnipeg will lose its status as a telecom headquarters and instead become the Western Canadian HQ for Bell. The name MTS will be dropped, the last act in a story that began in 1908 when the Manitoba government bought Bell Canada’s Manitoba telephone operations.

It’s also the fulfillment of a warning from then Opposition leader Gary Doer, who argued in 1996 the Tory government’s decision to privatize MTS would result in the company’s head office disappearing from Manitoba, along with jobs and local development.

Exactly 20 years later, Mr. Doer was proved to be right on that score, although it is far less clear that his opposition to the privatization of MTS was valid.

He believed the government should have held on to MTS for as long as possible, but the world was changing rapidly even then. Ultimately, a small government monopoly could not compete with modern telecoms. SaskTel might be an example to the contrary, but, if so, it is a very solitary example and one that is also unlikely to survive in the long term.

The Saskatchewan Crown corporation also benefited from a special federal arrangement that blocked telecom competition in the province for more than five years in the 1990s, ensuring its profitability and success. A similar deal was never sought in Manitoba.

In any event, the time to mourn for MTS ended a long time ago.

For now, the new Tory government in Manitoba should use whatever influence it possesses to urge the regulator to encourage more competition in a bid to retain and create jobs.

It would be a fitting final irony for MTS to be mourned by the party that did it in.