BCE, the parent company of Bell Canada, took steps Monday to expand its wireless, wireline broadband and television service footprint to Canada’s western provinces with a US$2.5 billion agreement to acquire Manitoba Telecom Services, Inc. (MTS).  Ranked as Canada’s largest provider of telecommunications services, BCE seeks to expand its Internet subscriber base by 6.6% and its Internet protocol-based TV subscribership by 8.6%, while boosting its ability to compete against Telus Corp. and Rogers Communications. 

Monday’s agreement would provide BCE with a majority of the broadband, cable TV and wireless customers served by MTS, which commands nearly 50% of the wireless market in Manitoba.  Respectively, Rogers and Telus serve 33% and 10% of the wireless market in Manitoba.  The transaction would enable BCE to add significantly to its current 6% share of that market.  To allay potential regulatory and competitive concerns, BCE plans to divest one-third of MTS’s post-paid wireless subscribers to Telus at closing and to assign one-third of MTS’s dealer locations to Telus.  A BCE official also confirmed the company’s commitment to invest US$800 million over the next five years to expand broadband network services and infrastructure throughout Manitoba. 

Under the terms of the agreement, MTS shareholders would receive cash and stock valued at C$40 (US$31.15) per share, which represents a 22% premium over MTS’s closing price as of Friday, April 29.  BCE would also assume C$800 million (US$623 million) in MTS debt.  Contingent upon receipt of shareholder and regulatory approvals, the parties hope to complete the transaction by early 2017.