MTS integration proceeding well, no 600 MHz set asides required
TORONTO – Bell Canada Enterprises CEO George Cope, like any wireless executive in Canada these days, is feeling pretty good.
All companies are posting strong recent subscriber additions and see growth continuing. Speaking to the BMO Capital Markets Media and Telecom Conference in Toronto on Tuesday, Cope pointed to the fact Canada has grown by 350,000 immigrants – and the phones and plans they buy – during the past 12 months or so as a leading reason why the business is so buoyant.
Add all those new Canadians to the growth of the “second line phenomenon”, where some would rather two phones and lines (for work and personal) rather than a single line, the ongoing growth in the consumption of video and that Canada is not as fully penetrated with wireless as other countries and it’s an attractive growth story at the moment, he explained.
Cope also discussed the integration of MTS into Bell, noting shareholders are likely to see speedy improvements in financials – but also a ramp up of investments in Manitoba, too. “We’ll see a margin improvement of almost 10% on (MTS) in the first 12 months of owning it, from an EBITDA perspective, because of the synergies we’re seeing on that,” he said.
However, on the wireline side, Bell is acquiring a different asset than when it gained control of Aliant in the east. “On the wireline side, there are investments required there. It’s not the asset that we purchased at Bell Aliant,” where the eastern telco had pushed fibre deep into its territories prior to BCE’s takeover.
As for the upcoming 600 MHz spectrum auction, Cope is of the same mind as Rogers CEO Joe Natale, who spoke at the same conference. That is, no spectrum set aside (which is what the ministry of Innovation, Science and Economic Development wants) should be allowed.
“Canadian taxpayers shouldn’t subsidize two of the largest telecom and cable companies in Canada,” he said, likely referring to Shaw Communications (Freedom Mobile) and Vidéotron, both of whom will benefit from the proposed auction rules. “Companies with market caps that are close to Telus’ market cap maybe don’t need Canadian taxpayers to subsidize their spectrum.”
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