[Bell Telus] "Merger would be bad for Canadian consumers"

4 posts / 0 new

Sun, 2009-08-16 13:20

toddsschneider

"A stock-market analyst plunged countless Canadian cellphone users into deep gloom this week by predicting a merger between Telus Corp. and BCE Inc. Shares in both companies rose after Jonathan Allen of RBC Dominion Securities Inc. said in a research report that a merger "is increasingly likely in the coming year or two as both companies look to cut costs and sustain margins."

"The merger idea has been heard before, but this time it seems more serious. Recent technical co-operation between the companies is starting to look like a portent of a deal some now call inevitable.

"We earnestly hope that's not so. The telecom sector needs more competition, not less. Anyone who doubts that need only look at this week's figures from the Organization for Economic Co-operation and Development, which said "medium-usage" Canadians pay $501 per year for cellular service, compared to an OECD average of $317 ...

Sun, 2009-08-16 21:46

stop raiding

Perhaps the title should be reworded "Merger would be bad for Canadian workers". This is stating the obvious but efforts to "cut costs" generaly means merging departments and laying off hundreds if not thousands of workers if this merger goes through. It would be interesting to hear someone from CEP's take on this as they have battled both Bell and Telus and would have a real sense of the impat if this merger were to occur.

Mon, 2009-08-17 10:36

toddsschneider

The telcos have a notoriously bad record when it comes to consumer relations. By far, the biggest class of complaints to the regulators are over cellphone accounts, for example.

One wonders how they are viewed at the labour boards?

Tue, 2009-08-18 21:11

Doug

Obviously it wouldn't be a happy story on the whole for workers at both companies. A merger creates duplication and the duplication would be resolved through layoffs affecting everyone from the people working in Bell/Telus stores on up to Vice-Presidents. That said, it's going to be an attractive proposition for both boards of directors for the same reason, gaining more revenue at less cost. There is, as the editorial mentions some moves toward this already. The new HSPA cellular phone network and the LTE network to succeed it will be jointly built and managed with Telus.

It's probably not on immediately both because of the concern in Quebec about Montreal possibly losing another huge head-office employer and what it's going to do to the telecommunications market as it exists now, particularly in wireless. The wireless part of that is going to change as a result of the last spectrum auction, but it'll take a couple of years for those customers to gain market share. I don't think the government will allow a merger until these are well-established.