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Bell’s MTS takeover receives federal approval; Xplornet gets Manitoba windfall

16 Feb 2017

Bell Canada Enterprises (BCE) and Manitoba Telecom Services (MTS) yesterday (15 February 2017) received all necessary approvals for their CAD3.9 billion (USD3.1 billion) merger from Innovation, Science & Economic Development Canada (ISED) and the Competition Bureau, prompting Bell to announce it will now complete the transaction and launch its ‘Bell MTS’ division on 17 March 2017.

Under a newly announced facet of the deal approved by the Competition Bureau and ISED, Bell and MTS will transfer the following assets to fixed-wireless broadband operator Xplornet Communications: a total of 40MHz of 700MHz, AWS-1 (1700MHz/2100MHz) and 2500MHz spectrum in Manitoba province currently held by MTS; 24,700 wireless customers once Xplornet launches ‘mobile wireless’ services based on the transferred spectrum; and six retail outlets (in Winnipeg and Brandon). Xplornet will receive ‘remedy network access’ from Bell MTS in urban areas of Manitoba for three years and ‘other operational benefits’ as it builds out its wireless network in the province. Financial terms of these transactions will not be disclosed.

The divestiture to Xplornet was prompted by the Competition Bureau’s findings that the consolidation of MTS into BCE could result in ‘substantial lessening or prevention of competition’, leading to higher prices and less choice for Manitobans, and the decision will apparently see Xplornet enter the mobile market against Bell MTS, Rogers and Telus.

In a previously announced agreement, now approved by the Competition Bureau, Bell will divest to national rival Telus approximately 25% of MTS’ post-paid mobile subscribers (altered from original estimates of ‘one-third’), for total proceeds of approximately CAD300 million, subject to final adjustments, and 13 MTS retail locations following the completion of the Bell MTS transaction.

Bell also announced yesterday that it will maintain current MTS wireless price plans for at least twelve months after the closing of the acquisition.

In early May 2016 BCE agreed to acquire 100% of provincial full-service telco MTS in a transaction valued at around CAD3.9 billion including debt, whilst also pledging to invest CAD1 billion over five years after the transaction closes to expand high speed fibre and 4G LTE networks and services in rural and urban locations across Manitoba.

Canada, Bell Canada Enterprises (BCE), Bell MTS, Telus Corporation, Xplore (formerly Xplornet)

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