This deal was inevitable. When the Provincial government sold MTS in 1996, critics forecast the company could not survive on its own. Not without deep pockets. BCE was once a large shareholder and there was widespread speculation it would buy full ownership. But Manitoba Telecom took a different path that ultimately failed. MTS tried to function on a national stage with the 2004 acquisition of Allstream but the deal faltered. When MTS successfully sold Allstream, many analysts believed a sale would be sooner rather than later.
Monday was that day. BCE has agreed to pay $3.9 billion to purchase Manitoba’s largest phone, internet and wireless company. Once approved by the regulators, there will be a strong brand presence in Winnipeg but the real decision making will cede to BCE headquarters in Quebec and Bell in Toronto.
The new owners will spend one billion dollars over five years to expand service in Winnipeg and rural Manitoba and have agreed to leave the MTS Centre name untouched. For now. Expect Bell MTS to go up everywhere else in this city. And when the naming deal expires, expect that to change too.
The deal is good for shareholders. President and CEO Jay Forbes and senior officials with shares will certainly cash in at $40 per share. I will assess this on whether service and price for their services remains competitive. And whether the new owners abide by a commitment to jobs in our city.
An expert from the Rotman School of Management at the University of Toronto says not to hold your breathe. Rick Powers says these deals are done for a reason. Efficiency is a key component and access to the Manitoba market, Powers explains.
A second deal announced by BCE will see one-third of monthly contract wireless customers and one-third of the MTS stories in Manitoba sold to Vancouver-based Telus Corp. Specific details have not been released. Consumers will judge this deal how they are treated as customers.
The acquisition will add 2,700 employees from Manitoba, doubling the western operation to 6,900 people. Winnipeg will be that western head office.
I expect most, but not all those jobs will remain.