By Ken Kelley
TORONTO – Bell Canada CEO Mirko Bibic insists his company isn’t the least bit troubled about the potential tie-up between Rogers and Shaw. While the jury – namely the CRTC, the Competition Bureau and ISED – considers the ramifications of such a deal upon the Canadian competitive landscape, Bibic says Bell plans to continue pushing forward and won’t let the merger distract from its normal course of business.
“[The merger] doesn’t change our strategy at all. In fact, I think it reinforces that we’re on the right track,” Bibic said during his appearance at Scotiabank’s 24th annual TMT conference. “We compete very well against anyone we face in the country’s different territories. But if you just take Western Canada, you’re essentially replacing one owner for a different owner on the same kind of asset. And that’s just an example; in eastern Canada doesn’t change much for us competitively.”
Referring back to Bell’s announcement in early February concerning the company’s ambitious capital expenditures plan for 2021, which includes a significant push on its fibre and Wireless Home Internet rollouts through an investment acceleration of up to $1.2 billion over the next two years, Bibic says the potential Rogers-Shaw merger makes that capex announcement take on an increased competitive importance.
“While the merging parties are focused on that, we will be continuing to build out our broadband networks and be in an even stronger competitive position than we are now.” – Mirko Bibic, Bell Canada
“We’re already seeing the regulatory process that the merger is going through. It’s going to be complex; it’s going to be lengthy; and it’s going to be noisy. While the merging parties are focused on that, we will be continuing to build out our broadband networks and be in an even stronger competitive position than we are now,” Bibic said.
“Once that regulatory process reaches the end, and if that merger were to close sometime next year, then the real hard work begins. And I know from experience you have to integrate two large companies, two workforces, two cultures, etc. It’s not easy and the consequences of getting it wrong are very costly… And while the merging parties are focused on that, we’ll be in year two of our accelerated capital program and will be even stronger at the end of 2022. So we’re on the right track strategically, and we’re on the right track competitively. I feel really good about where we are.”
Arguably the biggest takeaway from the pandemic, according to Bibic, is the importance of reliable, high-quality broadband networks, regardless of delivery method – wireline, wireless or fixed wireless. He believes the pandemic highlighted the importance of connectivity and has helped introduce a renewed appreciation for the conveniences offered by modern technology. But he also acknowledged there remains a significant urban-rural divide when it comes to tech and is something that can only be resolved with further investments.
“In order to bridge the urban-rural digital divide, [we need] to ensure every part of the country has globally-leading networks, which are fundamental to economic growth. There’s an appreciation that you have to have a regulatory and public policy environment that doesn’t disincentivize investment. I remain hopeful that the major regulatory decisions that are on the horizon will respect that,” he added, surely in reference to the CRTC’s impending wireless policy with its decision on mandated MVNOs and the review and vary decision into wholesale broadband rates for third party internet access providers.
Rogers Chief Technology Officer Jorge Fernandes also participated in the conference and not surprisingly, analyst Jeff Fan lead off his line of questioning by quizzing the executive about the Shaw merger and what technology benefits the company expected to realize as a result.
“One of the biggest benefits is scale,” Fernandes started. “It will help us close the connectivity gap that exists in Canada. Canada is unique in many ways; the population density and the way the population comes together make it incredibly costly to deploy networks through the country in an efficient way. [The merger] will allow us to bring deployments at scale. Additionally, Shaw has a very interesting existing cable, fibre and wifi footprint in the western part of the country, and this is very complementary to Rogers. For us, it’s adding to the capabilities we have today and means a lot of the efficiencies we’ll be able to drive will be added to our existing capability without having to make distracting choices.”
Ultimately, Fernandes said the Rogers-Shaw merger will bring increased capability to underserved Canadians along with the introduction of 3,000 net new jobs and an investment of $2.5 billion in 5G networks and technology through Western Canada over the next five years.
“We’ve [also] committed $1 billion to the Rogers Indigenous Connectivity Fund. When you think there’s around 600,000 underserved homes in Western Canada and the fact the government has put aside $1.75 billion in the Universal Broadband Fund, $1 billion will take us quite a long way. And then we’re estimating another $3 billion or so investment in technology. When you think that around 60% will be going into local investments, things like civil works, ancillary, digging up roads, infrastructure; these are all jobs that will be going into local communities. This is going to accelerate the deployment of 5G across the country and will be good for placing Canada in a competitive position globally. It will certain enable stronger competition across the country.”
