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Bell’s CTV purchase aimed at strengthening converged video strategy

13 Sep 2010

BCE, the parent company of Bell Canada and Bell Aliant, has agreed to buy the 85% of shares it did not already own in the country’s largest private broadcaster CTV, for CAD3 billion (USD2.9 billion) including CAD1.7 billion debt. ‘The transaction gives Bell full ownership of Canada’s best media assets to enhance the growth of TV, wireless and online services for years to come,’ BCE said in a statement. The group’s CEO, George Cope, added that CTV’s specialty television, digital media, conventional TV and radio broadcasting platforms will broaden Bell’s content assets for delivery across its mobile, online and TV platforms. ‘The adoption of mobile TV is set to accelerate rapidly,’ he said. ‘Video is going to be an integral part of Bell’s product offering and key growth driver going forward … In fact, we generate more revenue from TV today than we do from our home phone access business.’ The deal has a familiar feel, as BCE paid CAD2.3 billion for a controlling stake in CTV Globemedia in 2000 hoping to capitalise on convergent media opportunities, but sold off tranches to minority shareholders five years later in the face of disappointing returns and mounting debts. The re-purchase, expected to close by mid-2011 pending regulatory approval, involves splitting the assets of CTV Globemedia, giving Toronto-based shareholder Woodbridge Co control of the Globe & Mail newspaper, in which BCE will keep a 15% stake. Ivan Fecan, president and CEO of CTV Globemedia, said in a release: ‘In today’s digital age, it is extremely important to be a part of a vertically integrated company that can take advantage of content over multiple screens … As a division of Bell, CTV will be able to grow those capabilities even more. Simultaneously, Bell will benefit from our creative and content management skills.’

Meanwhile, Bell is in the process of expanding its IPTV footprint by spending CAD3 billion on network upgrades this year in order to bring its fibre-to-the-node (FTTN) ‘Fibe’ services, including the IPTV-based ‘Bell Entertainment Service’ to millions of additional homes. According to recent press reports the service is already available to around three million households, mostly in Toronto and Montreal, and around 50,000 subscribers have taken up the IPTV package so far, which is exclusively bundled for Fibe internet users. Bell Canada is already Canada’s largest satellite pay-TV provider via its Bell TV arm, with around two million customers. In Atlantic Canada, sister telco Bell Aliant had around 45,000 IPTV customers by end-June 2010, according to TeleGeography’s GlobalComms Database.

Canada, Bell Canada Enterprises (BCE)

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