Bell Purchase of MTS

[esquire]

Originally Posted by Stormer

SaskTel really has few options now. It can't remain independent forever.

I'm not sure about that...considering that Kenora, ON had a municipal telephone system until it was sold to Bell in 2008, I would think that a market of Sask's size can support a crown owned Telco for as long as it likes.

The difference in Manitoba is that once MTS was privatized in the 1990s, I think everyone regarded it as a bit of a sitting duck for acquisition by a larger player. The only surprise is that it took the better part of 20 years before it finally happened... it probably would have happened years ago but for the fact that MTS owned Allstream until recently.

[The Unknown Poster]

The chatter among employees isnt so much losing jobs. I think people think its higher ups that would be more likely to lose jobs. But people are trying to find information and looking at Bell's pay scale and seeing vastly lower pay for similar jobs. The concern is being told your job is safe but your salary is cut in half.

Does anyone have information about how Bell manages their collective agreements? Is it one large Canada-wide agreement or different regions have different agreements and thus different pay scales?

I know some employees are trying to make contact with Bell employees in other regions to get some insight. The feeling is, do employees stay with MTS now and hope for the best but risk being one of many suddenly looking for a job or try to get out now when the going might be easier...

The recent large scale early retirement plan was only management level and there has been hinting it could be offered among the clerks and technicians too. So that would be one way to reduce the work force significantly without forcing anyone out.

Will be interesting to see if MTS agrees to a new deal with the manager's (deal is currently expired and in negotiation) or tries to drag it out until the deal closes and let Bell slash.

[Nathan]

Originally Posted by esquire

I'm not sure about that...considering that Kenora, ON had a municipal telephone system until it was sold to Bell in 2008, I would think that a market of Sask's size can support a crown owned Telco for as long as it likes.

The difference in Manitoba is that once MTS was privatized in the 1990s, I think everyone regarded it as a bit of a sitting duck for acquisition by a larger player. The only surprise is that it took the better part of 20 years before it finally happened... it probably would have happened years ago but for the fact that MTS owned Allstream until recently.

Yup, agree on this. Sasktel has no need to privatise and compete/expand. It can continue to function exactly as it does and maintain the status quo. Sasktel option is the same as it always has been... Serve the people of Saskatchewan.

And funnily enough, I was thinking "I wonder why MTS hadn't been gobbled up yet." It appears it was in the offing. I'm sceptical as to whether Bell will keep many positions in Winnipeg (even as a "Western Headquarters"). Those promises are almost always the first to fly out the window. Same as if Sasktel were privatised and taken over... I'd fully expect almost all operations to be moved... Just the way it tends to go.

[Festivus]

Originally Posted by Nathan

Yeah, I'm thinking that'd be the only way too. Sasktel has had some operations outside the province, but nothing to this scale. Although I suppose Sasktel could finance a takeover through debt instruments, but for all intents and purposes, they would be Provincial bonds, and the Sask Party wouldn't want that hitting the summary financials, especially now...

SGI is the only other crown with business elsewhere as far as I know.

Yes, SGI operates insurance business in many other provinces. Strange to see a government of one province competing against private businesses in other provinces. Good for their revenue though, as some of that money comes back to SK.

Originally Posted by Stormer

SaskTel is actually more valuable than MTS. The merged entity would have to remain a listed company. It would basically be a privatization of SaskTel. This would have been a smaller version of the deal that created Telus. They could have gradually expanded nationwide and have been that 4th carrier the CRTC dreams about. The CRTC would have made life easy for ST/MTS.

SaskTel really has few options now. It can't remain independent forever.

I don't think Sasktel is in any precarious situation, really. This deal doesn't really change anything. This is only anecdotal of course, but people tend to like Sasktel as far as I can tell. Their fiber internet is also fantastic, though the roll-out has been slower than expected.

[Stormer]

Originally Posted by esquire

I'm not sure about that...considering that Kenora, ON had a municipal telephone system until it was sold to Bell in 2008, I would think that a market of Sask's size can support a crown owned Telco for as long as it likes.

The difference in Manitoba is that once MTS was privatized in the 1990s, I think everyone regarded it as a bit of a sitting duck for acquisition by a larger player. The only surprise is that it took the better part of 20 years before it finally happened... it probably would have happened years ago but for the fact that MTS owned Allstream until recently.

The SK Government has undertaken a third party "risk analysis" in light of the MTS deal. They are concerned with technological change, capital investment requirements and efficiencies in a small telecom. SaskTel has been very competitive and profitable so far, but there is concern - although I have been hearing that for 20 years.

[Nathan]

Originally Posted by Festivus

Yes, SGI operates insurance business in many other provinces. Strange to see a government of one province competing against private businesses in other provinces. Good for their revenue though, as some of that money comes back to SK.

It really doesn't matter that SGI has some operations in other provinces. From their perspective, it makes no difference if the insurance is provided by Intact, Wawanesa, Aviva, or one of the big banks. The governments still take the same premium taxes on all policies. The only place it would really make a difference is perhaps Ontario, which is home to most of the insurance companies in Canada, and which would lose out on the corporate taxes that a private insurer based there might provide. As a crown, SGI doesn't pay corporate taxes in Sask, but it does pay a dividend to the provincial government in lieu of said taxes (on the competitive operations anyway)... and does provide jobs that would be highly unlikely to be in Sask.

SGI is present both in BC and Manitoba, but steers completely clear of auto insurance in both places so as not to compete with the other crowns (I believe just like in Sask, you can get a private top up policy, and just like in Sask, it's available through the crown corp or through a competitive market player).


Question for the Manitobans... Has this takeover sparked any debate about the remaining Manitoba crowns? With the uncertainty surrounding MTS, are people generally getting more defensive of MPI/Manitoba Hydro or is it not really having an impact at all? And yes... I know MTS hasn't been a crown for 20 years... But as a former crown that is still based on Winnipeg, it's close enough for people to emotionally treat it like one.

I don't think Sasktel is in any precarious situation, really. This deal doesn't really change anything. This is only anecdotal of course, but people tend to like Sasktel as far as I can tell. Their fiber internet is also fantastic, though the roll-out has been slower than expected.

Yup... The only crown that really tends to get much flack is SGI... And having some experience in the insurance industry, that would definitely be a "you have no idea how good you have it" type situation.

[bomberjet]

MTS was privatized in the 90's by the PC's. So it's been gone for a while now.

There is some concern about PC's privatizing Hydro, even though they deny it. Manitoba Liquor Commission recently merged with Manitoba Lotteries, to become MLL (Manitoba Liquor and Lotteries). If anything were to be privatized it would be Hydro at great and lengthy debate. I don't even know if they could get it done. MPI and MLL I don't see going anywhere.

[esquire]

Originally Posted by Nathan

Question for the Manitobans... Has this takeover sparked any debate about the remaining Manitoba crowns? With the uncertainty surrounding MTS, are people generally getting more defensive of MPI/Manitoba Hydro or is it not really having an impact at all? And yes... I know MTS hasn't been a crown for 20 years... But as a former crown that is still based on Winnipeg, it's close enough for people to emotionally treat it like one.

The NDP used a lot of scare tactics to suggest that the PCs would privatize Hydro (interestingly, they didn't make any such intimations regarding MPI which would seem far likelier a candidate for privatization), but the PCs were silent on the point. I certainly don't recall them mentioning the privatization of anything during the campaign.

MPI was a political hot potato in the 80s when there were some massive rate shocks, but I think these days for the most part people are content with MPI subject to the odd exception (concerns over limited payouts for some auto accident-caused injuries being the most obvious example, but that's more an indictment of the no-fault scheme than ownership of the insurer).

I'd wager that if you polled Manitobans there wouldn't really be any groundswell of support for privatizing the major crown corps (MPI, Hydro, Liquor and Lotteries). But by the same token, I don't think you'd see gales of outrage if it happened either. I think MTS showed everyone that a crown could be privatized and the world wouldn't end, although of course now that many back-end administrative jobs and C-suite jobs will be leaving as a result of the Bell takeover that feeling might change.

[bomberjet]

My personal opinion would be, if we can only keep one crown corp, it would be Hydro. Don't get me wrong, Hydro needs a huge internal shake up and fat trimming. Politics also need to be separated further, including the Hydro boards that are appointed by each government. PC's cleaned house on the Hydro board yesterday, removing all the NDP and inserting all PC folk. But I think long term, they would be the best to keep.

[esquire]

^ Hydro is larded down with so much debt and so many inefficient projects, who on earth would take it? The only way it could happen is if the province carved off all the dead weight and took it on itself, and privatized only the desirable bits. And I don't think there's a huge chance of that happening.

[bomberjet]

Well exactly. If the NDP didn't raid all their profits. I would just prefer to keep the power utility as a public company. If it's done properly. In general, major utilities that people require to sustain life should be provided by the government. Water, power, health too. Private industry isn't the devil by any means and are in general better at innovation type things. Unions still get their hands in there and run a muck anyways.

Phone, insurance, garbage collection, etc I could really care less.

[Cyro]

Id just like to know 2 things about this acquisition..

Can I grandfather my MTS month by month, (contract expired) plan for eternity?
...and will they retain MTS's corporate security apparatus or bring in their own top guns?

Too much information...

[CoryB]

Some more bad news, in researching the wireless spectrum owned by MTS and how they came to own the rights Wind had bought there are actually two issues.

1. The restrictions on the transfer of ownership for the first round of spectrum auctions has ended. This means the initial block set aside for new entrants can be transferred to any company, with approval still. Instead of being an issue on both the wireless spectrum on competition sides it would now be limited to the competition aspects.

2. The reality of Wind Mobile coming in as a side deal to BCE's purchase of MTS is extremely unlikely. One calendar day before Wind was purchased by Shaw in December 2015 they sold off their wireless spectrum in several markets including Manitoba. To me this indicates the Shaw deal was already done and Shaw had no interest is coming to Manitoba as a wireless provider. It is doubtful in the five months since that sale that Shaw has changes their opinion.

We can still fight the sale but we need to focus on the right areas and have the facts lined up to support our position. The consolidation of wireless spectrum under the proposed BCE deal would, to my current understanding, not only limit competition immediately but would put up permanent barriers to competition ever being able to enter the market in a meaningful way.

[CoryB]

Originally Posted by Cyro

Id just like to know 2 things about this acquisition..

Can I grandfather my MTS month by month, (contract expired) plan for eternity?
...and will they retain MTS's corporate security apparatus or bring in their own top guns?

Too much information...

1. No, any wireless company can limited a plan to a specific network technology, ie CDMA, and they have in the past. When that technology is retired so is your plan. The other issue is it can becoming increasingly difficult and even impossible to purchase a new phone even if you wanted to pay for it completely upfront.

2. It is doubtful the corporate security from MTS will be retained unless you are talking about staff that act as pseudo police to enforce physical security of MTS buildings.

[cheswick]

Originally Posted by CoryB

Some more bad news, in researching the wireless spectrum owned by MTS and how they came to own the rights Wind had bought there are actually two issues.

1. The restrictions on the transfer of ownership for the first round of spectrum auctions has ended. This means the initial block set aside for new entrants can be transferred to any company, with approval still. Instead of being an issue on both the wireless spectrum on competition sides it would now be limited to the competition aspects.

2. The reality of Wind Mobile coming in as a side deal to BCE's purchase of MTS is extremely unlikely. One calendar day before Wind was purchased by Shaw in December 2015 they sold off their wireless spectrum in several markets including Manitoba. To me this indicates the Shaw deal was already done and Shaw had no interest is coming to Manitoba as a wireless provider. It is doubtful in the five months since that sale that Shaw has changes their opinion.

We can still fight the sale but we need to focus on the right areas and have the facts lined up to support our position. The consolidation of wireless spectrum under the proposed BCE deal would, to my current understanding, not only limit competition immediately but would put up permanent barriers to competition ever being able to enter the market in a meaningful way.

Not saying Shaw is interested, but just cause they weren't interested in entering the market as a 5th player, doesn't mean they wouldn't be interested in taking over a chunk of MTS' base.

[CoryB]

Things do change as Shaw bid on, won, then sold their own wireless spectrum before acquiring Wind. That said, having a significant local presence and appearing to not have interest in the Manitoba local wireless market is not promising. It could be that the current market rates do not allow a significant enough return on investment to make it worth pursuing options in Manitoba.

[bomberjet]

Overhead a brief piece of radio conversation today. Something about MTS rates are already increasing. Only by $5 for some packages. But they're on the move, just 2-3 days after the purchase. Of course Bell does not have formal control just yet, but maybe exerting their influence. I'm not sure.

[cllew]

Originally Posted by bomberjet

Overhead a brief piece of radio conversation today. Something about MTS rates are already increasing. Only by $5 for some packages. But they're on the move, just 2-3 days after the purchase. Of course Bell does not have formal control just yet, but maybe exerting their influence. I'm not sure.

Something like that would have been long planned before Bell made a move to buy MTS. It's just the timing doesn't look good.

[bomberjet]

Kind of what I was thinking, maybe a coincidence. I only heard a small snip it of what was said.

[CoryB]

Originally Posted by bomberjet

Overhead a brief piece of radio conversation today. Something about MTS rates are already increasing. Only by $5 for some packages. But they're on the move, just 2-3 days after the purchase. Of course Bell does not have formal control just yet, but maybe exerting their influence. I'm not sure.

The MTS rate increases people are learning of this week are separate from the sale to BCE. These type of rate increases are a normal part of operations for MTS. The largest is the $5/month increase to Home Phone Essentials, which is actually a feature bundle with a basic land line, three calling features and a preferred rate on long-distance. The price increase is in line with the calling features price increases.