Consent agreement addresses Commissioner’s concerns
February 15, 2017 — OTTAWA, ON — Competition Bureau
The Competition Bureau has reached an agreement today with BCE Inc. (Bell) and Xplornet Communications Inc. (Xplornet) related to Bell’s acquisition of Manitoba Telecom Services (MTS).
The Bureau’s investigation of the proposed merger determined that it would result in the removal of a strong regional competitor that was effective in constraining the pricing of Bell, Rogers and TELUS products.
The Bureau determined that the removal of MTS would likely result in a substantial lessening or prevention of competition for retail wireless services in Manitoba. This would likely lead to higher prices and fewer options for Manitobans.
Under the terms of the consent agreement, Bell must sell six retail stores, 24,700 subscribers and 40 MHz of spectrum to Xplornet, a leading provider of rural broadband internet through fixed wireless and satellite networks throughout Canada, including rural Manitoba. The divestiture to Xplornet will establish a new entrant in the Manitoba mobile wireless services market. Bell will also provide Xplornet with key services including expedited access to Bell’s towers in Manitoba for five years, temporary access to a mobile wireless network in a specified territory in Manitoba for three years, support for wireless handset procurement for five years and certain negotiated mobile wireless roaming services for five years. In addition, postpaid Bell Mobility customers in Manitoba who are under contract at the time of the consent agreement will be able to switch to Xplornet without penalty.
Additionally, Bell has committed to selling a significant number of its MTS subscribers and approximately one-third of its MTS dealer locations to TELUS.
The consent agreement, including Bell’s commitment to complete its transaction with TELUS, addresses the Commissioner’s concerns related to the transaction.
- In May 2016, Bell announced that it intended to acquire MTS in a transaction valued at approximately $3.9 billion.
- The retail locations to be sold to Xplornet are located in Winnipeg and in Brandon.
- During the course of its investigation, the Bureau conducted interviews with numerous stakeholders, including customers, mobile wireless service providers, consumer organizations and government and regulatory agencies. The Bureau also obtained records and data from a number of market participants, including by way of court order, and consulted with industry and economic experts.
- The Bureau also invited Canadians to provide information on the proposed transaction through a web form on its website. The Bureau received more than 1,800 forms which better informed its investigation of the proposed transaction.
- According to the Supreme Court, a remedy is satisfactory when it ensures that, following a transaction, competition is not substantially less than it was before the merger.
"While today’s consent agreement is expected to address my concerns with the merger, we will continue to keep a close watch on competition in Manitoba and across Canada in the mobile wireless services market. Given the findings of our review, any future potential mergers by Canada’s three largest mobile wireless providers, Bell, Rogers and TELUS, can expect to receive a close examination by the Bureau."
- The consent agreement is available on the Competition Tribunal website.
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