Bell was not consulted on Globalive/Telus network sharing agreement, CFO said
By Ken Kelley
TORONTO – Executives from each of Canada’s major telecoms, along with their counterparts from some of the country’s smaller players, gathered in Toronto on Wednesday for the first in-person edition of the TD Securities Telecom and Media Conference since the Covid pandemic began.
BCE executive vice-president and chief financial officer Glen LeBlanc kicked off the day’s proceedings, with discussion around the company’s recent financial performance as well as the implications of the sale of Shaw’s wireless assets, Freedom Mobile, in order to settle anti-competitive concerns brought on by the Rogers-Shaw tie-up.
A survey commissioned by Globalive, whose founder and chairman Anthony Lacavera, is looking to buy back Freedom, a company he started, suggests there is widespread anxiety among Canadians over the cost of their cell phone bills amid persistent, increasing inflation.
“We’ve had a fourth wireless player in most of the markets we’ve operated in for some time,” LeBlanc said. “Whether that be Eastlink in Atlantic Canada, the competitive landscape created by Videotron in Quebec, or Shaw [Freedom Mobile] in Ontario and the West. We’ve learned to compete and I think our results speak for themselves that we’ve done so quite effectively,” he said.
“I think a competitor that enters the market will not be as strong as Shaw in the West due to the potential lack of bundling opportunities. We all know that’s an area this industry is working really hard on chasing, that whole home customer. For us right now, we’re just going to continue doing what we’re doing and servicing the customer better.”
Earlier this month, the Competition Bureau also expressed concern about the viability of Freedom being divested from Shaw. It noted in a press release that before the merger was announced, Shaw planned to enter new wireless markets and launch its 5G network, among other investments, but that the company’s reduced marketing and promotional activity has seen competitiveness take a step backwards.
LeBlanc did not offer a comment on the recent news that Globalive and Telus struck a network sharing agreement contingent on the former’s successful acquisition of Freedom Mobile, instead stating Bell was not involved in those discussions. However, he did tout Bell’s ongoing network-sharing deal with Telus, stating it’s served shareholders of both companies well and that any third-party addition to their agreement would require a conversation between the parties.
When it came his turn to take the interview hot seat, Telus executive vice-president and CFO Doug French spoke in rather general terms around the Globalive agreement.
“At the end of the day, there’s already an MVNO framework in Canada and there’s still pricing and other items to resolve through that process to validate or enable the MVNO environment, but it’s on a path,” he offered.
“If there’s going to be a remediation partner in this, if this deal gets approved and if there was a network share [agreement] that needs to be signed, we would consider it as a Switzerland-type of approach to whomever. But we have to work through that and decide, as long as the terms were right, but MVNO is going to happen anyway. We just have to make sure we have potentially a more commercial outcome, instead of a government regulated outcome.”
Asked for his thoughts on the pending Rogers-Shaw transaction, French said the company is focused on keeping their eye on the prize regardless of the merger outcome.
“The regulator has got a lot of files in front of them, from what are the next spectrum rules to what do they have to do on competitiveness and what is the future vision on rollouts within our industry. So, taking a bit more time to [examine the Rogers-Shaw agreement] makes sense and making sure there aren’t other chain reactions. It’s going through its due process and we’re going to participate, [with respect] to our opinion where appropriate,” he said.
“But from the end result, we’re going to continue with our strategy being the best customer service, best networks and best products, and have a social purpose of how you do it as well. Not only do team members want to work for us, customers want to stay with us when they see the impact that we have in their community. When you’ve already got the best networks and the best customer service and you’re giving back to their communities, it actually makes a difference. So, I think irrespective of the outcome, we’re ready for whatever that next battle will hold.”
Perhaps to no one’s surprise, the Rogers-Shaw merger was the first topic of discussion when Rogers CEO Tony Staffieri took the stage.
In terms of the approval process, Staffieri noted the file now sits with the tribunal, which has an injunction hearing slated to take place on June 29 and 30. He said that throughout the merger process, the company still has the opportunity to continue to work with the bureau, and that the company is encouraged with the bureau’s willingness to work with Rogers to figure out the right remedy to complete the transaction.
“I think when you step back, there’s a couple of things to reiterate, and keep in mind,” Staffieri said. “We heard the government in terms of the desire to have a fourth wireless player in the market, and we’re committed to work on that objective. And so, we’re selling all the assets of Freedom Wireless,” he explained.
“A second key point is Rogers and Shaw continues to be committed to each other to get this transaction done and we’ll work through the process to get there. And then the final important point is, we have a good roster, if I can call it that, of qualified bidders that we think are ultimately going to hit the mark in terms of what’s required from a remedy standpoint. I think it’s important as you look to us move through the process, that those fundamental principles are there.”
Glenn Brandt, Rogers CFO, said delays notwithstanding, the companies are continuing to work on integration on several fronts.
“Within Rogers, we are making room across our organization for bringing in Shaw leaders and employees to join the combined company team,” Brandt said.
“Work continues through that exercise to identify the redundancies and duplications that you would anticipate. But we’re also identifying the processes and enterprise systems that where we can wrest some of the synergies away through elimination of duplicated Enterprise Resource Management Systems. There’s a number of different buckets and categories we’re looking at through our procurement group, and we’re starting to identify the key suppliers that we’re going to need for the combined entity.”
The other major storyline unfolding in the industry in Western Canada right now is Quebecor’s potential expansion.
Fresh on the heels of a court victory over Telus relating to the spectrum auction in Western Canada, Québecor’s CFO Hugues Simard denied the company’s desire to expand outside of its Quebec homebase is a sign that growth has somehow stalled.
Québecor’s Q1 results showed a 0.3% decrease in revenue to $903.4 million compared to the same period in 2021.
“We’re responding to the opportunity that we see in terms of growing wireless outside of our current footprint,” the CFO said.
“There is still growth in Quebec; we’re a little over 22% wireless in Quebec and I think that’s very good considering the number of years we’ve been at it. When you get close to 25% in a market controlled by four main players, it’s an obvious statement that further growth will be increasingly difficult or expensive. I think it’s normal for us to start looking at other opportunities for growth in English Canada based on the current pricing conditions and current competitive levels.”
