Friday, August 14, 2009

Bell Telus Merger, Canada To Get A Single Telco Within Two Years

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A few years ago there was a proposal that would have seen Canada's two biggest Telcos become one. At that time Telus had proposed to acquire Bell, who in turn accepted a buy out by the Ontario Teachers' Pension Plan which would have seen Bell be turned into a privately held company. The buy out plan fell apart and Bell is still a publicly traded company.

There is new speculation that Canada's two big telcos will again attempt to become one. Jonathan Allen, of RBC Dominion Securities Inc writes “Faced with cyclical and secular pressures on the top-line, we believe that a BCE-Telus merger is increasingly likely in the coming year or two as both companies look to cut costs and sustain margins,”

At the time when the original acquisition talks were going on the issue of how to get the joining to the two big telcos approved by the competition bureau was pretty big. With three new cell phone carriers starting within one year and growing competition from cable companies in home phone will make it easier to get "Belus" approved by the competition bureau.

Signs beyond speculation by stock analysts are already pointing towards uniting Bell and Telus, On Thursday, August 13th Telus filed with Canadian and American securities regulators to raise raise up to $4-billion in debt, equity and or warrants. There is no doubt that Bell is worth more than 4 billion but it's enough to get some kind of merger or buyout started.

Many are fearing that a Bell-Telus merger will mean higher prices and customer service that is even worse than it is now. But at least it means that the Palm Pre will be available from coast to coast. As a Telus Mobility user where Bell is not available I like that.

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