Telus Takeover of Bell

[jdobbin]

I'm sure a merger would be great for the shareholders, but it's going to pretty much suck for the customers and definitely suck for the employees.

Aside from wiping out thousands of jobs, it also leaves a single entity with a near monopoly presence in Canadian telecommunications. Merging with their major competitor leaves Telus and Bell with no reason to offer the customer competitive rates. What options are left for consumers? A handful of pint-sized cellular companies.

I figure that your idea of what will happen with a merger will be the dominant one among the Canadian public.

Want to make someone angry quickly? Ask them about their Bell or Telus cell phone bills.

[Michael Bluth]

I'm sure a merger would be great for the shareholders, but it's going to pretty much suck for the customers and definitely suck for the employees.

Aside from wiping out thousands of jobs, it also leaves a single entity with a near monopoly presence in Canadian telecommunications. Merging with their major competitor leaves Telus and Bell with no reason to offer the customer competitive rates. What options are left for consumers? A handful of pint-sized cellular companies.

I figure that your idea of what will happen with a merger will be the dominant one among the Canadian public.

Want to make someone angry quickly? Ask them about their Bell or Telus cell phone bills.

There are still a lot of options out there for cell phone service.

You think Richard Branson won't crank up the Virgin Mobile presence in the country if Bell and Telus are reaping excessive profits?

[jdobbin]

The Angus Reid polls says a majority of Canadians do not support the Telus/Bell merger.

http://www.reuters.com/article/governmentF...529390820070625

The Angus Reid Strategies poll, released on Sunday, found 48 percent of respondents believe the federal government should not approve the merger if it were to occur, while only 27 percent think the deal should get a go-ahead from Ottawa and 25 percent are unsure.

[Riverwind]

The Angus Reid polls says a majority of Canadians do not support the Telus/Bell merger.

You forgot to mention the part about Canadians liking the idea of takeover by US private equity even less. Given a choice between the two Canadians would rather see the merger between Telus and Bell (65%)

[geoffrey]

Canada is a better country if the Liberals don't get to govern for decades at a time without being challenged.

Sure. Unless the replacement does exactly what the Liberals did (and in some cases worse... ie. spending).

[August1991]

Incidentally, has anyone noted why Bell is a target of a takeover? (That is, has anyone wondered why its "assets" are undervalued?)

Bell's assets have under performed because of misguided diversification programs over the years. Having said that, there isn't an asset in Canada that could not be bought by large investment funds. Bell used to be too big to eat. Now there are few assets in the world that couldn't be had for a price.

Uh, Dobinn, that was my point.

We concentrated power in the hands of a few Bell managers and look where it has brought us.

Thankfully, there is a degree of competition in the telecommunications sector now and Bell can be bought. I cannot say the same about Hydro-Quebec, for example. Or any provincial ministry of health. Yet these large bureaucracies concentrate power in a few people's hands too but their misguided policies don't appear in undervalued share prices.

Some are saying Telus and Bell are vulnerable because they were not allowed to become income trusts.

Income trusts have nothing to do with this. The new entities will have to pay (or avoid) corporate tax just like Bell now.

Coyne is right that the market should have been open to competition. At the moment, Harper will take a hands off approach but if 30,000 people are laid off and then the combined company raises rates to cover the purchase price while being protected from competition, then you are going to have some people who are really steamed.

In any event, if a few thousand head office jobs in Montreal go west, there will be a price to be paid by the government in power.

The question of head offices leaving Montreal has been debated for decades, at least since Sun Life's departure in the 1970s. I don't think this matters much anymore. The head offices more often than not left West Montreal and simply moved their anglophone employees out of the province. BTW, it was Videotron that took out the full page ads in the G&M arguing in favour of open competition in the phone market.

As to the loss of jobs, it is hard to imagine an industry more reliant on new technology than telecommunications. So of course there will be job losses. The only way the Canadian economy will grow in the long run is through increased productivity which invariably means job losses.

Along these lines, have you ever looked at the Dow-Jones 30 in, say, 1910 and the Dow-Jones 30 in 2000?

[jdobbin]

The Angus Reid polls says a majority of Canadians do not support the Telus/Bell merger.

You forgot to mention the part about Canadians liking the idea of takeover by US private equity even less. Given a choice between the two Canadians would rather see the merger between Telus and Bell (65%)

I don't think you'll see Canadians breathing a sigh of relief just to see one large monopoly in the the form of Belus.

[geoffrey]

I don't think you'll see Canadians breathing a sigh of relief just to see one large monopoly in the the form of Belus.

Sounds like 'Billus'.

Anyways... the only thing that irks me about this is now I'm going to be back with Telus. There is no escaping. I wonder if I'll have the option to out my contract, or if I can find a way to.

Rogers always had the better phone selection.

[jdobbin]

Uh, Dobinn, that was my point.

We concentrated power in the hands of a few Bell managers and look where it has brought us.

Thankfully, there is a degree of competition in the telecommunications sector now and Bell can be bought. I cannot say the same about Hydro-Quebec, for example. Or any provincial ministry of health. Yet these large bureaucracies concentrate power in a few people's hands too but their misguided policies don't appear in undervalued share prices.

Income trusts have nothing to do with this. The new entities will have to pay (or avoid) corporate tax just like Bell now.

The question of head offices leaving Montreal has been debated for decades, at least since Sun Life's departure in the 1970s. I don't think this matters much anymore. The head offices more often than not left West Montreal and simply moved their anglophone employees out of the province. BTW, it was Videotron that took out the full page ads in the G&M arguing in favour of open competition in the phone market.

And now we'll have an even bigger monopoly with Belus.

I think some people would disagree with you about the income trusts and merger mania.

Bell doesn't just have anglophone workers. As for Videotron, don't think for a minute that they aren't a possible takeover target themselves. Why wouldn't they ask for open phone competition? Then they could e bought over for a higher price as well.

I suppose in the interests of productivity, we will see more businesses move their head offices from Quebec.

[geoffrey]

I think some people would disagree with you about the income trusts and merger mania.

I'm just about the biggest fan of IT's and the biggest opponent of Harper's move to tax them... but I disagree with you.

This isn't an income trust issue.

I suppose in the interests of productivity, we will see more businesses move their head offices from Quebec.

The over taxed and regulated economies of the East are quickly losing traction... of course companies are going to flee to greener (tax) pastures.

[jdobbin]

I'm just about the biggest fan of IT's and the biggest opponent of Harper's move to tax them... but I disagree with you.

This isn't an income trust issue.

The over taxed and regulated economies of the East are quickly losing traction... of course companies are going to flee to greener (tax) pastures.

And once again I point out that several analysts and business people have commented in the National Post and the Globe about the income trust decision being responsible for some of the mergers and takeovers we are seeing now.

Quebec's largest corporations might be the first to see this movement. Alcan and Bell in the next year? Who'd have though ten years ago? Will the last one out of Quebec, turn out the lights?

[geoffrey]

And once again I point out that several analysts and business people have commented in the National Post and the Globe about the income trust decision being responsible for some of the mergers and takeovers we are seeing now.

This topic is beyond the 2 second sound bites they can give you in the NP and G&M. Essientially, I don't see why a trust wouldn't be as easy of a target... despite briefly increased valuation based on some short term tax savings. I'm really not sold on this.

Income trusts may have delayed the takeovers, but it was bound to happen sooner or later.

Quebec's largest corporations might be the first to see this movement. Alcan and Bell in the next year? Who'd have though ten years ago? Will the last one out of Quebec, turn out the lights?

At the end of the day, Quebeckers did this to themselves. They had the choice, they chose socialism. Oh well.

[jdobbin]

I guess the question of Bell and Telus is moot now.

Telus just pulled out. It could be a strategy but who knows.

http://www.cbc.ca/money/story/2007/06/26/bcebids.html

Telus Corp. dropped out of the running to acquire BCE Inc. on Tuesday, saying it was unhappy with the bid process.

"The inadequacies of BCE's bid process did not make it possible for Telus to submit an offer," the Vancouver-based company said in a statement issued just prior to the opening of stock markets.

The Telus statement came minutes after a 9 a.m. ET deadline for interested groups to submit their offers to BCE.

Telus disclosed last week it was in non-exclusive merger talks with BCE aimed at creating an "all-Canadian" telecom giant.

Analysts said a Telus bid would have been a front-runner for BCE because the two telecoms would have been able to realize significant savings as a single company. But a Telus-BCE combination would also have faced rigorous scrutiny from competition authorities and regulators.

[Mad_Michael]

I can't imagine any basis upon which government interference into this merger of two private sector companies could be justified.

It is none of the government's business whether or not the shareholders of BCE and Telus wish to combine their assets and operations, or not.

[Mad_Michael]

And now we'll have an even bigger monopoly with Belus.

Neither Bell nor Telus had a monopoly here, nor will they have one when merged.

Indeed, if Bell had a real monopoly, they wouldn't be bothering to merge with a minor competitor.

Bell doesn't just have anglophone workers.

I didn't know they had any of those. All the top execs always seem to have French-Canadian names.

[jdobbin]

I can't imagine any basis upon which government interference into this merger of two private sector companies could be justified.

It is none of the government's business whether or not the shareholders of BCE and Telus wish to combine their assets and operations, or not.

Actually, it is. Harper admitted as much when he said he would let the regulators decide.

[Mad_Michael]

Actually, it is. Harper admitted as much when he said he would let the regulators decide.

That the law gives the government permission to regulate as such does not negate the fact that there is no substantive or rational justification for the absurdity of this policy (which was my point). I know perfectly well that the Government has the legal authority to interfere in just about anything and everything in this country.

[jdobbin]

Neither Bell nor Telus had a monopoly here, nor will they have one when merged.

Indeed, if Bell had a real monopoly, they wouldn't be bothering to merge with a minor competitor.

I don't where "here" is.

Telus is hardly a minor competitor.

By most definitions Bell and Telus monopolize the markets they operate in. They might not have complete monopolies but they are a force to be reckoned with. Together, they do control even more of the market.

In any event, it is moot. The merger is off.

I know that one company was looking forward to the merger. MTS was hoping to pick pieces that the CRTC and Competition department would have forced Telus or Bell to sell off.

[jdobbin]

That the law gives the government permission to regulate as such does not negate the fact that there is no substantive or rational justification for the absurdity of this policy (which was my point). I know perfectly well that the Government has the legal authority to interfere in just about anything and everything in this country.

For me, it doesn't matter one way or the other if they had merged. Bell nor Telus dominates my market.

My meaning all along was that it might be good for the shareholders but there is no evidence it would be good for the consumers.

And for Quebec, it would have meant the loss of another head office.

[Mad_Michael]

My meaning all along was that it might be good for the shareholders but there is no evidence it would be good for the consumers.

And my point is that it is none of the consumer's business what the shareholders what to do, provided it is legal.

If the consumers don't like it, there are other options/products available.

[White Doors]

For me, it doesn't matter one way or the other if they had merged. Bell nor Telus dominates my market.

My meaning all along was that it might be good for the shareholders but there is no evidence it would be good for the consumers.

Cable companies are eating away at telco's market share, you would have had lots of choice. MTS/Allstream itself will be bought out soon. Not as attractive though as they do not have coast to coast wireless branding. A very small time player.

I think Telus decided Bell was a bit too big of a bite to chew.

It was silly for them to entertain it anyways. Besides, if BCE is bought up by private equity, it won't stay that way - it wll be auctioned off piece by piece and Telus can bid on the one piece of ivory that they want at that time, instead of taking the whole elephant.

And for Quebec, it would have meant the loss of another head office.

No one is more used to that than Quebec, they would have gotten over it.

[jdobbin]

If the consumers don't like it, there are other options/products available.

Certainly not as many as there are for other countries. Our cell phone bills are twice what most industrialized nations have.

[jdobbin]

Cable companies are eating away at telco's market share, you would have had lots of choice. MTS/Allstream itself will be bought out soon. Not as attractive though as they do not have coast to coast wireless branding. A very small time player.

I think Telus decided Bell was a bit too big of a bite to chew.

It was silly for them to entertain it anyways. Besides, if BCE is bought up by private equity, it won't stay that way - it wll be auctioned off piece by piece and Telus can bid on the one piece of ivory that they want at that time, instead of taking the whole elephant.

No one is more used to that than Quebec, they would have gotten over it.

Cable companies are certainly getting into the phone market and vice versa the phone companies into theirs. However, the price still is greater than most industrialized markets. So is it really competition when the price is this high?

As for the talk on an MTS takeover; I keep hearing about it but it never happens. MTS has applied for the next round of wireless bandwidth to be auctioned off. Bell and Telus are against anymore being sold off.

[jdobbin]

That the law gives the government permission to regulate as such does not negate the fact that there is no substantive or rational justification for the absurdity of this policy (which was my point).

It looks like the Tories have thrown in one of their favourite arguments into the mix: "national security."

It is one are they will now put in legislation to prevent some foreign takeovers.

http://ca.news.yahoo.com/s/afp/070626/cana...itics_takeover2

"I expect that national security will be one of the variables they will review," he told the paper.

"For most countries, national security is actually one of the variables they take into consideration," he added.