The Financial Post reports in its Friday edition that a decision by competition regulators across the Atlantic may put a kink in BCE's proposed $3.1-billion acquisition of Manitoba Telecom Services. The Post's Jonathan Ratner, writing in Trading Desk, says that on Wednesday, the European Commission blocked CK Hutchison Holdings' 10-billion-pound purchase of O2, Telefonica SA's U.K. mobile phone business.
Europe's competition commissioner said that by reducing the number of major mobile phone network operators from four to three, customers would be faced with higher prices and less choice. Maher Yaghi, an analyst at Desjardins Capital Markets, thinks the decision in Europe could create a precedent that Canadian regulators and governments will need to consider when looking at BCE's deal with MTS. It would also see the market in Manitoba move from four network operators to three.
BCE has proposed selling one-third of MTS's wireless subscribers to Telus. Mr. Yaghi thinks BCE could potential improve its chances of getting the deal past regulators by selling spectrum or postpaid subscribers to Shaw Communications. That would allow the company to potentially enter the Manitoba market at some point in the future.
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