What is Teachers learning about their bid to take Bell private? [Note to all grammar students: since Teachers is a proper noun, “Teachers” is singular – referring to the pension plan, as opposed to the collection of teachers – lower case – that would be treated in the plural]
Two months ago, I wrote that the markets were doubting Bell’s privatization would go through.
Talk about understatement.
At that time, Bell stock was trading at $39.40. Yesterday, it fell to 33 and change.
In November (when I decided to buy some – full disclosure), the yield was around 25%. Now, should the deal go through at the official offering price, the annualized yield will be over 100%.
The deal from Ontario Teachers Pension Plan is supposed to provide shareholders with $42.75 per share. There is likely another dividend to be received between now and closing, for a total of another 37.5 cents. Assuming the deal is finalized in April, each share is worth about $43 – nearly $10 more than yesterday’s price, for a return of better than 30% in 3 months.
Bell issued a statement in December to try to calm the markets. Any updates?
On Friday, the CRTC had a brief hearing to adjudicate a dispute between Videotron on Bell over inside wiring.
The history of dispute goes back to early 2006, when Bell filed an application requesting Videotron to discontinue its practice of requiring cable telephone customers to disconnect Bell’s high-speed Internet services. The CRTC process was temporarily suspended while the parties tried to resolve the dispute through negotiations. A little over a year ago, in December 2006, the Commission was asked again to intervene.
About 10 months later, following a national consultation on whether a new network interface device should be installed into homes, the CRTC issued a decision last November, determining that it would not set a national policy mandating a standardized network interface device, because of a lack of evidence of its necessity.
Recognizing that Bell and Videotron were still unable to agree on disconnection processes for single family homes, the two parties presented their case to a panel of 3 commissioners on Friday. Fundamentally, the problem is that cable and telephone wires often enter the house in different places. From a cable company’s perspective, whichever inside household telephone jack is closest to the cable modem will become the cable telephony network interface device, but first they have to disconnect the inside wire from its connection to Bell’s network.
Bell appears to be concerned that it often has to roll a truck to reconnect service, if the customer wants to switch back or if the house is sold – it would obviously prefer to have that all done remotely.
When I read the Bell file and the Videotron file, as well as the two replies [Bell / Videotron], I am surprised that Bell is sticking with a request for Videotron to install the kind of network interface that the Commission already ruled wasn’t needed as a matter of national policy. It would seem to be contrary to a general regulatory policy of technological neutrality.
I suspect this adjudication is going to be turned around pretty quickly. We’ll watch for the Commission’s ruling.
Earlier this week, I did an interview with Shelagh Rogers of CBC Radio One that played Wednesday morning on her Sounds Like Canada programme, on the subject of cell phone towers.
I have written previously of the growing NIMBY sentiment that could impede community economic development. I was surprised that the head of a community business association in Chilliwack, BC has been campaigning against cell phone towers.
Perhaps I would be more sympathetic if her concerns were that cell phone towers are generally inconsistent with aesthetics in a heritage or even residential community. But here she was, the head of her community business association, arguing against any cell phone towers anywhere.
It wasn’t good enough for her that Health Canada is comfortable with its studies – she cited asbestos as a precedent for the government getting it wrong.
I won’t dispute anyone’s right to believe in the potential for still undiscovered environmental impact from anything. For my part, I keep hoping scientists will confirm my belief in the therapeutic value of matjes herring. I was just surprised to see a leader of a business association promoting less advanced community infrastructure, in effect, a return to dark ages.
It isn’t going to happen. Why?
Because cell phones save lives.
That is the sound bite that Canada’s wireless industry needs to be getting out in front of the public, telling stories of mobile 911 calls; families being reassured; helping hands. Four simple words: cell phones save lives.
We want our doctors, our police, our families, our friends to be available when we call. Service providers compete to provide the best quality network – that kind of competition, complemented by frequent co-opetition (such as the Bell/TELUS network sharing), leads to better customer service. That means service providers need places to put base stations.
Still, I sense there is a palpable sentiment building up across the country, concerned about the aesthetics of towers and as yet unsubstantiated environmental health risks associated with wireless waves. With more service providers, more subscribers, more RFID-enabled devices, it is hard to imagine turning back the clock. But, there seems to be an emerging counter-movement, perhaps energized by other environmental sentiments.
That is why the wireless industry needs to get the message out front – cell phones save lives.
Municipalities are in competition with each other for jobs and tourist dollars. Which cities will prove to be the most creative and progressive in mediating concerns, while encouraging placement of wireless infrastructure, thereby improving their own competitive position?
In its first major decision of the year, the CRTC has given the final go-ahead to roll out broadband to more than 350 rural communities across Canada. Decision 2008-1 takes $650M that had been accumulated in excess local fees paid to incumbent local carriers (ILECs) by subscribers in urban markets and uses the money to subsidize rural broadband service.
The Commission has given the ILEC telcos two months to confirm their ability to launch service by the end of 2011 – any remaining funds get returned to urban subscribers – presumably those who have remained with the ILECs, although the CRTC has asked for proposals on how the money can best be returned.
It is a lengthy read, aided by appendices with detailed listings of communities and service areas. The Commission recognized that various technologies, including unlicensed fixed wireless services, will provide quality broadband experiences for consumers.
The ILECs are also spending 5% – or around $30M – on enhancing telecom services for Canadians with disabilities, including some innovative enhancements to classic message relay services.
There will be more to emerge on this file
Update [January 18, 11:30 am] Catherine McLean’s story in the Globe suggests that about half the deferral account – around $300M – will be rebated to urban consumers.
Alec Saunders has proposed an interesting form of civil disobedience to fight against system access fees – which he calls the ‘drip feed for Canadian wireless carriers.’
He suggests that people should call the customer service lines for their service providers and just inquire about the system access fee.
It costs the carrier $25 to $30 per call to receive my call. Three or four calls per year asking about what that “system access fee” is on my statement will wipe out any profits they make from nickeling and diming me. It’s a little subversive, but it’s just the sort of thing that appeals to the Canadian in me. And perhaps if enough people did the same, the bean counting MBAs who work in product management at Canadian carriers would see the logic of discontinuing this practice.
Will Alec’s suggestion start a national grassroots campaign? We saw the potential rallying power of influential bloggers when Michael Geist triggered his Copyright Canada campaign.
Wireless service providers should start watching their call centre numbers.
Otherwise, consumers should be aware that not all wireless service providers charge the system access fees. Check out the pay as you go plans at some of the independent retailers like 7-11 or Virgin Mobile. You have a choice, and more choice is likely on the way this spring.
