Is the Bell-MTS deal on the rocks? Will Shaw save it?

bell mts

It’s been nearly seven months since Bell Canada announced an agreement to buy Manitoba Telecom Services for $3.9 billion CAD and still there has been no official word from the federal government on what it thinks of the deal.

The Competition Bureau is the primary regulator Bell has to satisfy with this purchase, but since the Bureau doesn’t do public hearings the way the CRTC does, we really don’t know what it is telling BCE officials about the deal, or the questions it has, but the six-plus months of silence from both the feds and the Bureau, predictably has some tongues wagging.

For what it’s worth, when Telus purchased Public Mobile in 2013, it received Competition Bureau approval inside of a month. Rogers Communications rescue of Mobilicity from bankruptcy in 2015 received government approval inside of a week (although Rogers likely was given an unofficial nod prior to its official bid for the brand).

Those deals were much smaller in scope but they did have something in common with Bell-MTS: They took a wireless competitor out of the market.

However, even though Mobilicity and Public are now gone, Canadians in most regions of the country are left with a choice of at least four wireless providers. If the MTS deal does go through as-is, Manitobans will have a choice of just three. Bell did take some steps to mitigate the competitive concerns because their purchase calls for Telus to receive a third of MTS wireless subscribers and a third of MTS retail locations.

However, according to sources in Ottawa who asked not to be named, that will likely not be enough to satisfy the federal government. Officials have been telling some that the government wants to ensure Canadians everywhere have the maximum choice possible when it comes to wireless companies.

Innovation, science and economic development Minister Navdeep Bains approached the topic in his speech to the International Institute of Communications Canadian chapter conference this week when he said “Canadians across the country told us that vibrant telecommunications competition and choice are essential.”

Then, in a media scrum right after his speech (pictured), we asked him point blank what he and the federal government thinks of the proposed transaction.

“We’re currently reviewing that and it would be premature for me to make a determination at this stage,” he said, “but I think if you look at our past track record, clearly when it came to upholding the CRTC ruling with regards to having access for internet service providers to wholesale and fibre to the home, we clearly have shown our commitment to more competition which benefits consumers.”

Also during the scrum, when asked about competition and spectrum, he expanded: “For us, we really believe in competition, choice, and availability of service and we’ve been very clear that more competition is good for the consumer so those kinds of dynamics will be determined in the coming months but clearly we want to see more competition.”

Add to that the fact that MPs in the Friendly province are under pressure from their constituents to keep MTS, Manitoban, as well as the fact BCE buying MTS will leave just a single provincial wireline broadband and telecom provider for businesses – and the betting in Ottawa is that this deal will have to be altered to move forward.

The potential beneficiary? Shaw, of course. It is already a wireline broadband, local phone and TV competitor in Winnipeg and if Bell were able to put together a deal with Shaw where Shaw’s wireless subsidiary, Wind, comes away with some spectrum, since Wind has none in Manitoba, perhaps some customers and retail locations, then Bell’s MTS purchase would preserve the four-wireless-competitor principle and stand a much better chance at approval from the feds.

This article was originally published on Cartt.ca.