Bell Buying MTS is Bad News, Here’s Why: CMCR Project

“Bell’s bid to buy MTS is a big deal, but it is also bad news”, says the Canadian Media Concentration Research Project in response to the Competition Bureau’s request for input from Canadians regarding the acquisition.

Earlier this month, Bell made a surprise announcement that would reduce the number of wireless players in Manitoba from four to three, prompting discussions as to whether or not the Canadian mobile landscape is undergoing a change that would benefit users.

The CMCR Project has looked into the matter and put together a comprehensive report with factual evidence underpinning their statement about why the merger is bad news for Manitobans and all Canadians.

While Bell says the merger will benefit Manitoba – it would bring it out of the past into the future by investing $1 billion over the next five years – the CMCR Project rejects that view. A closer look at MTS’ overall performance reveals that MTS is more profitable and invests relatively more capital in its networks that Bell.

Also, a pricing comparison among Manitoba, Ontario, B.C., and Alberta demonstrates that wireless prices are lower in Manitoba: “Price increases by the national carriers have been lower in Manitoba than elsewhere . . . due to the disciplining effect that MTS has on their behaviour”, the press release reads.

The report, prepared by Benjamin Klass and Dr. Dwayne Winseck, Ph.D. under the auspices of the CMCR Project, also points to other international markets showing that four or more rivals lead to more competitive pricing. But remaining in Canada, a good example is Québec or the Maritimes, where Videotron and Eastlink both offer affordable alternatives to the national carriers.

Screen Shot 2016 05 26 at 21 50 45

In the light of the above, the CMCR Project recommends three options for the Competition Bureau: (1) block the merger; (2) require divestiture of spectrum licences, towers, retail locations, and subscribers to an independent competitor; and (3) require open-access provisions for the new entity.

You can read the full report put together by the CMCR Project here.

Technology enthusiast, rocker, biker and writer of iPhoneinCanada.ca. Follow me on Twitter or contact me via email: istvan@iphoneincanada.ca

  • JB

    Change won’t come to Canada until the big 3 are split up. No more flanker brands under the same corporate umbrella. Make the wireless compete with the broadband. Split off their cable TV divisions.

  • YoGoerz

    I almost figure that the Mantioba government should repurchase MTS and make it a crown corp again. As an Albertan I feel the pain of little competition and by removing one competitor in other markets at a time until we can’t see how much the incumbents don’t compete elsewhere is bad for the consumer.
    It’s really easy for them to say we pay more than other countries, because our terrain makes building and maintaining a network difficult, when we can’t see there is competition only a couple provinces over.
    Industry Canada should make it so carriers cannot charge different amounts by province. Either make the good plans go nation wide or they have to raise prices everywhere and look hilarious in comparison to the Sasktells and MTS’ out there.