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Thread: BCE to buy MTS for $3.1B

  1. #16
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    Bains Gives Bell-MTS Merger a Pass Despite Competition Bureau Finding Serious Wireless Market Problems
    Michael Geist, Feb 21
    ...
    The government’s news release on the merger approval attempted to shift attention toward the expansion of Xplornet into the Manitoba market as the satellite Internet provider picked up some wireless spectrum, six retail locations, and 24,700 MTS customers that were otherwise headed to Bell. Xplornet plans to use the assets to launch its own wireless service in the province.

    Canadian consumers can be forgiven, however, for sensing that they have seen this movie before and knowing that it does not end well. The inability of smaller, wireless only entrants such as Public Mobile and Wind Mobile to create viable fourth competitors leaves little hope that Xplornet will do any better. Indeed, with the same challenges – the lack of bundled services, weak purchasing power for new devices, and threats from discount flanker brands deployed by the Big Three – a small new entrant will be no match for Bell, Telus and Rogers.

    The Xplornet news distracted from the far more important findings of the Competition Bureau. Its analysis of the merger confirmed what critics of the wireless sector have long maintained, namely that markets with a strong fourth competitor feature better pricing than markets dominated by the big three. The bureau, which had access to confidential internal company data, issued the following unambiguous conclusion:

    “As a result of coordinated behaviour among Bell, TELUS and Rogers, mobile wireless prices in Canada are higher in regions where Bell, TELUS and Rogers do not face competition from a strong regional competitor. Conversely, the Bureau concluded that where Bell, TELUS and Rogers face competition from a strong regional competitor, prices are substantially lower. The Bureau concluded that the lower prices are caused by the presence of a strong regional competitor who can disrupt the effects of coordination among Bell, TELUS and Rogers.”

    The bureau’s findings represent a near-complete indictment of the current wireless competitive landscape in Canada. While the Big Three insist they actively compete against each other, it found that they actually co-ordinate with each other in markets without a strong fourth competitor.
    The bureau’s findings represent a near-complete indictment of the current wireless competitive landscape in Canada. While the Big Three insist they actively compete against each other, it found that they actually co-ordinate with each other in markets without a strong fourth competitor. It is the presence of a strong fourth player that disrupts that co-ordination and which helps explain why the companies engaged in a lobbying blitz against the potential entry of U.S. giant Verizon several years ago.

    The bureau gave the merger a pass by concluding that beefing up Telus’s presence in Manitoba and adding Xplornet would help offset the loss of MTS. But those assurances are difficult to square with the evidence on the competitive effects of a strong regional competitor.
    ...

    --
    ISED News Release
    Competition Bureau Statement

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    ‘We’re almost a new entrant’: Bell, Telus work to build wireless brands in Manitoba
    Financial Post, June 2

    The signals are hard to miss – six-figure cheques for charities, earnest introduction letters in local papers, a new name for the Winnipeg Jets’ home ice.

    Telecom giants BCE Inc. and Telus Corp., are laying it on thick to woo customers and build their brands in Manitoba on the heels of Bell’s $3.9-billion purchase of Manitoba Telecom Services, a deal that catapulted both from bit players to leading roles in the province’s wireless market.
    ...
    But as the two telcos expand their presence – Bell MTS’s market share is about 40 per cent and Telus’ will double to about 20 per cent – branding experts, consumer advocates and Telus itself expect a tough slog to win over customers who don’t get to choose whether to stay with Bell MTS or switch to Telus.

    This may be particularly tough given the legacy of MTS, which offered notably lower price points for unlimited data packages than the Big Three carriers in other provinces.
    ...

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    Could be good for consumers for at least a little while as Telus will need to offer better pricing to gain customers, and Bell/Rogers will have to work to keep theirs.

    Lots of people willing to switch to Rogers now with the better coverage.

  4. #19
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    Bell MTS hikes most of its rates
    Winnipeg Free Press, Sep 28



    Bell MTS exec Dan McKeen says the alternative — ‘if we don’t do increases and let the service get worse’ — would not have been a ‘happy path.’


    Almost exactly six months after its friendly $3.9-billion takeover of MTS, Bell has quietly raised rates on just about everything but wireless service.
    ...
    Home phone charges are up $1.95 per month, TV charges are up $2.95 and internet is up $3.95. That puts the cost of a basic phone line at $36.95 per month, up from $35.15, and basic high-speed internet has risen from to $63.95 a month from $60.
    ...
    Calling features, TV packages, fibre-optic network and other services have also gone up in price.

    Dan McKeen, Bell MTS senior executive in Western Canada, said such rate increases, which telcos across the country tend to implement on average at least once per year, are driven by additional cost inputs required to continue to operate increasingly well-used networks.
    ...
    Bell MTS wireless rates are unchanged. At the closing of Bell’s acquisition of MTS in mid-March, the company committed to leaving wireless rates unchanged for 12 months.

    Consumer groups were outspoken about their concerns regarding rate increases during the regulatory deliberations prior to the closing of the Bell-MTS deal.

    Gloria Desorcy, executive director of the Consumers’ Association of Canada’s Manitoba division, said, "One thing we were concerned about before the sale was that in provinces where there was even one less regional player, like is the case now in Manitoba, rates were a lot higher. That was certainly a concern."

    Desorcy said the worry is that prices will go up and continue to go up.

    In fact, there have been three price increases since February 2016 in various products offered by MTS and Bell MTS.
    ...
    Last edited by pjw918; 09-29-2017 at 12:03 PM.

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    Quote Originally Posted by pjw918 View Post
    Bell MTS exec Dan McKeen says the alternative — ‘if we don’t do increases and let the service get worse’ — would not have been a ‘happy path.’

    Home phone charges are up $1.95 per month, TV charges are up $2.95 and internet is up $3.95. That puts the cost of a basic phone line at $36.95 per month, up from $35.15, and basic high-speed internet has risen from to $63.95 a month from $60.
    We all have to do our part to keep the Bell execs traveling down that happy path to gluttonous wealth


    Quote Originally Posted by pjw918 View Post
    Bell MTS wireless rates are unchanged. At the closing of Bell’s acquisition of MTS in mid-March, the company committed to leaving wireless rates unchanged for 12 months.

    In fact, there have been three price increases since February 2016 in various products offered by MTS and Bell MTS.
    Yep, welcome to the AB/BC/ON experience. Don't forget to take your complimentary lube on the way out



    Sent from my Z957 using HoFo mobile app
    Damn!

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