09:31:52 EDT Fri 29 Mar 2024
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BCE Inc (2)
Symbol BCE
Shares Issued 870,700,037
Close 2017-02-15 C$ 58.65
Market Cap C$ 51,066,557,170
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BCE receives final regulatory OK for MTS acquisition

2017-02-15 09:05 ET - News Release

Also News Release (C-MBT) Manitoba Telecom Services Inc

Mr. George Cope of BCE reports

BELL ACQUISITION OF MTS RECEIVES FINAL REGULATORY APPROVALS FROM ISED AND COMPETITION BUREAU, TRANSACTION SET TO CLOSE ON MARCH 17

BCE Inc.'s Bell and Manitoba Telecom Services Inc. (MTS) have welcomed approval by Innovation, Science and Economic Development Canada (ISED) and the Competition Bureau of Bell's $3.9-billion acquisition of MTS. Bell has now obtained all regulatory approvals required to complete the transaction and launch Bell MTS on March 17, 2017.

"Bell MTS will deliver the best broadband networks and unprecedented service innovation to Manitobans, growing competition, choice and value in communications throughout the province. In addition to our capital investments to roll out our Fibe and mobile LTE [long-term evolution] services in Manitoba, Bell MTS is also announcing today that we will maintain current MTS wireless price plans for at least 12 months after the closing of the acquisition," said George Cope, president and chief executive officer of BCE and Bell Canada.

Bell MTS plans to invest $1-billion over the next five years to enhance broadband networks and services in Manitoba, including the introduction of Gigabit Fibe Internet, offering access speeds up to 20 times faster than those currently available; Fibe TV, Canada's best TV service as rated by consumers nationwide; and Bell's award-winning LTE wireless network.

Regulatory approval details

Bell and MTS worked closely with federal regulators to achieve the necessary approvals. In a consent agreement entered into with the Competition Bureau and filed with the Competition Tribunal, Bell and MTS have agreed to transfer to Xplornet Communications Inc. a total of 40 megahertz of 700-megahertz, AWS-1 and 2,500-megahertz wireless spectrum currently held by MTS, which has also been approved by ISED; 24,700 wireless customers once Xplornet launches its mobile wireless service; and five retail outlets in Winnipeg and one in Brandon. Xplornet will receive transitional remedy network access from Bell MTS in urban areas of Manitoba for three years and other operational benefits as Xplornet builds out its own wireless network in Manitoba. Financial terms of these transactions will not be disclosed.

In an agreement announced May 2, 2016, and now approved by the Competition Bureau, Bell will divest to Telus Corp. approximately one-quarter of MTS postpaid subscribers, for total proceeds of approximately $300-million, subject to final adjustments, and 13 MTS retail locations following the completion of the Bell MTS transaction.

Increased synergies, Bell MTS operational benefits

Bell also announced that it expects to capture increased annualized cost synergies of approximately $100-million from the integration of MTS, double the previous $50-million estimate announced on May 2, 2016. The additional savings result from reduced wireless roaming and network sharing, network backhaul and wholesale costs; increased wholesale revenue; Bell's volume-based purchasing advantages; and other operational efficiencies.

"With increased scale in broadband wireless, TV and Internet, and the increased operational synergies we will realize, the integration of MTS with Bell supports our consolidated adjusted [earnings before interest, taxes, depreciation and amortization] growth and industry-leading wireline margin performance. Immediately accretive to free cash flow, this transaction enhances Bell's successful broadband investment and innovation strategy while supporting our focus on delivering sustainable dividend growth to our shareholders going forward," said Glen LeBlanc, chief financial officer of BCE and Bell Canada. "We look forward to updating our 2017 BCE financial guidance targets to reflect the benefits of the MTS acquisition when we report our [first quarter] 2017 results on April 26."

  • Bell adds approximately 710,000 wireless, Internet and Internet protocol TV (IPTV) customers in Manitoba, a 5-per-cent increase in Bell's total broadband service subscribers.
  • Bell MTS becomes the No. 1 wireless provider in Manitoba with more than 470,000 total pro forma subscribers; both Bell Mobility and Virgin Mobile customers get full access to the extensive MTS network in Manitoba.
  • Bell MTS will operate a total of 69 retail locations offering wireless and wireline services across the province; MTS products will be available for the first time in Bell, The Source, Tbooth Wireless and WirelessWave locations.
  • Additional population coverage of approximately 1.28 million people and 540,000 households in Manitoba, increasing Bell's national wireline service footprint to more than 25 million Canadians, or 11.2 million of the country's 15.4 million total households.
  • Bell Media's fast-growing CraveTV video streaming service will be available to MTS TV customers as well as Internet subscribers.
  • Bell Business Markets (BBM) adds the state-of-the-art MTS data centre in Winnipeg to its roster of 27 centres, the largest data hosting network in Canada.
  • Approximately half of BBM's top 100 customers operate in Manitoba, enabling Bell to more efficiently provide them enterprise business communications and connectivity services.

Bell and MTS have already announced a wide range of major infrastructure investments for Manitoba, including Gigabit Fibe and LTE-A mobile service for the Innovation Alley hub in downtown Winnipeg, the deployment of advanced broadband services to the town of Churchill, continuous broadband wireless coverage along Highway 75 in Southern Manitoba, and the expansion of mobile and wireline broadband networks in Northern Manitoba, including along Highway 6 to Thompson, in Flin Flon and in five small indigenous communities.

Prior to the final regulatory approvals announced on Feb. 15, 2017, the transaction was overwhelmingly supported by MTS shareholders on June 23, 2016, and approved by the Manitoba Court of Queen's Bench on June 29, 2016. On Dec. 20, 2016, the Canadian Radio-television and Telecommunications Commission (CRTC) approved the transfer to Bell of the broadcasting distribution undertaking licence held by MTS. As part of the transaction closing arrangements, the amount of the reverse break fee payable by Bell to MTS in certain circumstances has also been increased from $120-million to $200-million.

About Bell

As Canada's largest communications company, Bell provides consumer, business and government customers with a comprehensive and innovative suite of broadband wireless, TV, Internet and business communication services from Bell Canada and Bell Aliant. Founded in Montreal in 1880, Bell is wholly owned by BCE.

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