MONTRÉAL, Feb. 15, 2017 /CNW
Telbec/ - BCE Inc. (Bell) (TSX: BCE) (NYSE: BCE) and Manitoba
Telecom Services Inc. (MTS) (TSX: MBT) today welcomed approval by
Innovation, Science and Economic Development Canada (ISED) and the
Competition Bureau of Bell's $3.9
billion acquisition of MTS. Bell has now obtained all
regulatory approvals required to complete the transaction and
launch Bell MTS on March 17,
2017.
"Bell MTS will deliver the best broadband networks and
unprecedented service innovation to Manitobans, growing
competition, choice and value in communications throughout the
province. In addition to our capital investments to roll out our
Fibe and mobile LTE services in Manitoba, Bell MTS is also announcing today
that we will maintain current MTS wireless price plans for at least
12 months after the closing of the acquisition," said George Cope, President and CEO of BCE and
Bell Canada.
Bell MTS plans to invest $1
billion over the next 5 years to enhance broadband networks
and services in Manitoba,
including the introduction of Gigabit Fibe Internet, offering
access speeds up to 20 times faster than those currently available;
Fibe TV, Canada's best TV service as rated by consumers nationwide;
and Bell's award-winning LTE wireless network.
Regulatory approval details
Bell and MTS worked
closely with federal regulators to achieve the necessary approvals.
In a consent agreement entered into with the Competition Bureau and
filed with the Competition Tribunal, Bell and MTS have agreed to
transfer to Xplornet Communications Inc. a total of 40 MHz of 700
MHz, AWS-1 and 2500 MHz wireless spectrum currently held by MTS,
which has also been approved by ISED; 24,700 wireless customers
once Xplornet launches its mobile wireless service; and 5 retail
outlets in Winnipeg and 1 in
Brandon. Xplornet will receive
transitional remedy network access from Bell MTS in urban areas of
Manitoba for 3 years and other
operational benefits as Xplornet builds out its own wireless
network in Manitoba. Financial
terms of these transactions will not be disclosed.
In an agreement announced May 2,
2016 and now approved by the Competition Bureau, Bell will
divest to TELUS Corp. (TSX: T, NYSE: TU) approximately one-quarter
of MTS postpaid subscribers, for total proceeds of approximately
$300 million, subject to final
adjustments, and 13 MTS retail locations following the completion
of the Bell MTS transaction.
Increased synergies, Bell MTS operational
benefits
Bell also announced today that it expects to
capture increased annualized cost synergies of approximately
$100 million from the integration of
MTS, double the previous $50 million
estimate announced on May 2, 2016.
The additional savings result from reduced wireless roaming and
network sharing, network backhaul and wholesale costs; increased
wholesale revenue; Bell's volume-based purchasing advantages; and
other operational efficiencies.
"With increased scale in broadband wireless, TV and Internet,
and the increased operational synergies we will realize, the
integration of MTS with Bell supports our consolidated adjusted
EBITDA growth and industry-leading wireline margin performance.
Immediately accretive to free cash flow, this transaction enhances
Bell's successful broadband investment and innovation strategy
while supporting our focus on delivering sustainable dividend
growth to our shareholders going forward," said Glen LeBlanc, Chief Financial Officer of BCE and
Bell Canada. "We look forward to
updating our 2017 BCE financial guidance targets to reflect the
benefits of the MTS acquisition when we report our Q1 2017 results
on April 26."
- Bell adds approximately 710,000 wireless, Internet and IPTV
customers in Manitoba, a 5%
increase in Bell's total broadband service subscribers.
- Bell MTS becomes the #1 wireless provider in Manitoba with more than 470,000 total pro
forma subscribers; both Bell Mobility and Virgin Mobile customers
get full access to the extensive MTS network in Manitoba.
- Bell MTS will operate a total of 69 retail locations offering
wireless and wireline services across the province; MTS products
will be available for the first time in Bell, The Source, Tbooth
wireless and WirelessWave locations.
- Additional population coverage of approximately 1.28 million
people and 540,000 households in Manitoba, increasing Bell's national wireline
service footprint to more than 25 million Canadians, or 11.2
million of the country's 15.4 million total households.
- Bell Media's fast-growing CraveTV video streaming service will
be available to MTS TV customers as well as Internet
subscribers.
- Bell Business Markets (BBM) adds the state-of-the-art MTS data
centre in Winnipeg to its roster
of 27 centres, the largest data hosting network in Canada.
- Approximately half of BBM's top 100 customers operate in
Manitoba, enabling Bell to more
efficiently provide them enterprise business communications and
connectivity services.
Bell and MTS have already announced a wide range of major
infrastructure investments for Manitoba, including Gigabit Fibe and LTE-A
mobile service for the "Innovation Alley" hub in downtown
Winnipeg, the deployment of
advanced broadband services to the town of Churchill, continuous broadband wireless
coverage along Highway 75 in southern Manitoba, and the expansion of mobile and
wireline broadband networks in northern Manitoba, including along Highway 6 to
Thompson, in Flin Flon and in 5 small indigenous
communities.
Prior to the final regulatory approvals announced today, the
transaction was overwhelmingly supported by MTS shareholders on
June 23, 2016 and approved by the
Manitoba Court of Queen's Bench on
June 29. On December 20, the Canadian Radio-television and
Telecommunications Commission (CRTC) approved the transfer to Bell
of the broadcasting distribution undertaking licence held by MTS.
As part of the transaction closing arrangements, the amount of the
reverse break fee payable by Bell to MTS in certain circumstances
has also been increased from $120
million to $200 million.
Caution concerning forward-looking statements
Certain
statements made in this news release are forward-looking
statements, including, but not limited to, statements relating to
the proposed acquisition by BCE Inc. ("BCE") of all of the issued
and outstanding common shares of Manitoba Telecom Services Inc.
("MTS") (the "MTS Transaction"), the proposed divestiture to TELUS
Corporation ("TELUS") of a certain portion of MTS' postpaid
wireless subscribers and retail outlets (the "TELUS Transaction"),
and the proposed divestiture to Xplornet of certain wireless
spectrum, wireless subscribers and retail outlets and the receipt
by Xplornet of certain operational benefits (the Xplornet
Transaction and, together with the MTS Transaction and the TELUS
Transaction, the "Proposed Transactions"), the expected closing
date of, and the annualized cost synergies and other benefits
expected to result from, the MTS Transaction, our network
deployment and capital investment plans in Manitoba, the maintenance of current MTS
wireless price plans for at least 12 months after closing the MTS
Transaction, our business outlook, objectives, plans and strategic
priorities, and other statements that are not historical facts.
Forward-looking statements are typically identified by the words
assumption, goal, guidance, objective, outlook, project, strategy,
target and other similar expressions or future or conditional verbs
such as aim, anticipate, believe, could, expect, intend, may, plan,
seek, should, strive and will. All such forward-looking statements
are made pursuant to the "safe harbour" provisions of applicable
Canadian securities laws and of the United States Private
Securities Litigation Reform Act of 1995.
Forward-looking statements, by their very nature, are subject to
inherent risks and uncertainties and are based on several
assumptions, both general and specific, which give rise to the
possibility that actual results or events could differ materially
from our expectations expressed in or implied by such
forward-looking statements. As a result, we cannot guarantee that
any forward-looking statement will materialize and we caution you
against relying on any of these forward-looking statements. The
forward-looking statements contained in this news release describe
our expectations at the date of this news release and, accordingly,
are subject to change after such date. Except as may be required by
Canadian securities laws, we do not undertake any obligation to
update or revise any forward-looking statements contained in this
news release, whether as a result of new information, future events
or otherwise. Forward-looking statements are provided herein for
the purpose of giving information about the Proposed Transactions
and their expected impact, including our network deployment and
capital investment plans in Manitoba. Readers are cautioned that such
information may not be appropriate for other purposes.
The completion and timing of the Proposed Transactions are subject
to certain closing conditions, termination rights and other risks
and uncertainties. Accordingly, there can be no assurance that the
Proposed Transactions will occur, or that they will occur on the
terms and conditions, or at the time, contemplated by the parties.
The Proposed Transactions could be modified, restructured or
terminated. There can also be no assurance that the synergies and
other benefits expected to result from the Proposed Transactions,
as well as our network deployment and capital investment plans in
Manitoba, will be realized. The
nature and value of capital investments planned to be made in
Manitoba over 5 years assume
completion of the MTS Transaction as well as our ability to access
or generate the necessary sources of capital. However, there can be
no assurance that the MTS Transaction will be completed or that the
required sources of capital will be available with the result that
the actual capital investments made by us in Manitoba during such period could materially
differ from current expectations.
About Bell
Canada's largest communications company,
Bell provides consumer, business and government customers with a
comprehensive and innovative suite of broadband wireless, TV,
Internet and business communication services from Bell Canada and Bell Aliant. Bell Media is
Canada's premier multimedia company with leading assets in
television, radio, out of home and digital media. Founded in
Montréal in 1880, Bell is wholly owned by BCE Inc. (TSX, NYSE:
BCE). To learn more, please visit BCE.ca or Bell.ca.
The Bell Let's Talk initiative promotes Canadian mental health
with national awareness and anti-stigma campaigns like Bell Let's
Talk Day, a national day of conversation about mental health, and
significant Bell funding of community care and access, research and
workplace initiatives. Bell Let's Talk Day 2017 set new records
with 131,705,010 total messages of support driving $6,585,250.50 more in Bell funding for Canadian
mental health at no extra cost to participants. To learn more,
please visit Bell.ca/LetsTalk.
Media inquiries:
Jacqueline Michelis
(613) 785-1427
jacqueline.michelis@bell.ca
Investor inquiries:
Thane Fotopoulos
(514) 870-4619
thane.fotopoulos@bell.ca
SOURCE Bell Canada