MTS sale to Bell has some Manitobans worried about price hikes
Montreal-based BCE agrees to buy Manitoba Telecom Services for $3.9B
The multibillion-dollar out-of-province acquisition of Manitoba Telecom Services announced Monday already has some internet, television and cellphone customers questioning whether a rate hike is on the way for Manitoba.
Manitoba and Saskatchewan have long been touted for their competitively priced service plans compared to other provinces. The low prices have been attributed to strong regional competitors, with MTS, Bell and Rogers' fight to offer the most affordable services to customers driving prices down.
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Some Manitobans are concerned prices could rise in line with national rates now that Montreal-based Bell Canada Enterprises has agreed to buy MTS for $3.9 billion.
According to Bell Canada president and CEO George Cope, the Manitoba market stands to benefit from the deal.
In a separate transaction, BCE has agreed to sell about one-third of MTS's post-paid subscriber base and retail outlets to Telus to keep competition at a healthy level.
"[In terms of] pricing in the market place, clearly Telus's position in the wireless industry is significantly enhanced by this transaction, as is Bell," Cope told reporters in a teleconference Monday morning.
"You would expect, I think, the market to continue to be as competitive as it [has been], and if not maybe even more as a result."
Cope said he thinks the deal will take nine to 12 months to get through the regulatory process before it's complete. Agencies that must approve the deal include the Competition Bureau.
Jay Forbes, president and CEO of MTS, said he doesn't anticipate any big changes to market forces in Manitoba as a consequence of the deal.
"We've had a very competitive marketplace here in Manitoba, and I don't see that changing," he said.
Deal developed 'very quickly'
Forbes said while rumours have been swirling for some time about the purchase of his company, sale talks with Bell came up "very quickly" two weeks ago.
Prices are bound to increase to levels more commonly found in the rest of the country.- Michael Geist
Consumers are likely to enjoy better-quality services once the deal is done, he said.
"What I do see changing is that level of technology that our customers are going to have access to," he said. "By virtue of being part of that larger Bell organization, they will enjoy access to better technologies, better internet access, better data."
Forbes added MTS has a devoted customer base that Bell will work to keep satisfied.
"I think they will be taking a long, hard look at what we have done well and looking to preserve as much of that as they can," Forbes said.
Prices 'bound to increase,' lawyer says
Now that Bell and Telus have divied up MTS between themselves, competition could be reduced further still, according to one expert.
"With MTS out of the way — and Bell and Telus sharing the same wireless network — prices are bound to increase to levels more commonly found in the rest of the country," lawyer Michael Geist wrote in his blog.
As for whether specific rate changes are on the way, a spokesperson with Bell said "it's early to talk about pricing."
"We'll bring better broadband services to Manitobans, like Gigabit Fibe Internet, Fibe TV and mobile LTE Advanced, and we look forward to competing head on with the other communications service providers in the province," the spokesperson said.
"We have a five-year, $1-billion investment plan that will bring new broadband coverage and services to Manitobans in cities, towns and rural locations alike."
The move will see 2,700 workers move from MTS to Bell's phone business. Bell's western workforce, headquartered in Winnipeg, will almost double in size to 6,900 employees.
Worry about price hikes
People on social media speculated about what the deal would mean for phone bills in Manitoba:
Ready for your cell bill jump by $$$ instantly with MTS <a href="https://twitter.com/Bell">@Bell</a> sale? Just checked: mine hikes >$40/mo for same plan! <a href="https://t.co/epMSQWiCVo">https://t.co/epMSQWiCVo</a>—@gtheule
With files from CBC's Meaghan Ketcheson
With files from The Canadian Press