MTS customers: hold on tight, because Bell is driving
Your next few years could be a bumpy ride
Once upon a time I worked for Bell, and once upon a time I got an employee discount there. I managed to get an iPhone 5 shortly after its release date, knew exactly when it was in the store, and got an insane data plan for $55 a month. I was on cloud nine.
A year and a month later, I bought out of my contract for $390.
If you're an MTS customer, you might want to ponder that. In case you've been living under a rock, on Sunday Bell announced it would be buying MTS for a cool $3.9 billion. That's big news, and a lot of people are talking about what it means for prices. Prices are important, but they're only one problem among a litany of others. Chief among them: coverage.
Part of the reason I left Bell was, despite what our corporate training told us was "better technology for penetrating basements," I couldn't get service in basements. I went on a road trip to Assessippi that year, and the second we left Brandon I lost service (it didn't return until we passed Brandon again). I once took my phone to Birds Hill Park with 10 friends—I was the only one there with no bars. Downtown, Bell was great—and blazing fast, because nobody was using it—but anywhere on the periphery was abysmal.
But that was a number of years ago now, and they've been steadily working on coverage. Right?
Although their coverage map is still spotty compared to other provinces it operates in, Bell's Manitoba coverage looks better than it used to. Having said that, a good friend of mine recently took his Bell Samsung Galaxy S6 to a golf course just outside the city, and he completely lost service.
Let's dwell on that for a sec: he lost coverage ten minutes outside the city, in an area within the coverage map, on a wide-open green space, in twenty-goddamn-sixteen.
Doomed from the start
When Bell first entered Manitoba, they seemed destined for obscurity: they had decent pricing, but their coverage was terrible, and when they decided to share towers (a la MTS and Rogers), they chose Telus to pal with. That`s right, Telus—a phone company with equally crappy market share and equally crappy coverage (back in the flip phone days, my friends and I would tease anyone with Telus for their crappy service—but we used voice calls a lot more).
Before I bought my Bell phone, corporate assured me coverage was "much better" than it was when they got here. A year later, I was $390 poorer and over the hype.
Will Rogers want to share towers with Bell? Maybe. It would make them money, and it would benefit Rogers if Bell did upgrades. But it's not a guarantee, and it might conflict with Bell sharing Telus towers. Who will win the sharing lottery?
Some have argued the deal is good for the province. They say MTS couldn't have survived on its own much longer (a point I would dispute given its market share—while declining, it was still 77.4% of the local telecommunications industry in 2014), or they point to the $1 billion over 5 years Bell promises to use for infrastructure. That's all well and good—but what about the customers it sells to Telus?
MTS customers are for sale
Perhaps I missed something—the article only touches on it once—but according to the Winnipeg Free Press:
BCE has also agreed in principle to sell about one-third of Manitoba Telecom’s monthly contract wireless customers and one-third of the MTS stores in Manitoba to Vancouver-based Telus Corp. (TSX:T).
"Clearly, Telus’s position in the wireless industry is significantly enhanced in this transaction, as is Bell’s," BCE president and CEO George Cope said.
"So you’d expect, I think, the market to continue to be as competitive as it has been -- if not maybe even more -- as a result of all this."
[Courtesy of Winnipeg Free Press—emphasis mine]
Holy shit, what? First of all, to say the market will be "as competitive as it has been", when you're actually reducing competitors, is insane. Telus might get more customers—which would make them more competitive, I suppose—but Bell would absorb all the MTS customers. Do the math: that's less competitors, which is, by definition, less competition.
Second, under what circumstance is it okay to up and sell customers to a competitor? What about the contracts these people signed? Will one-third of MTS customers get a letter one day saying, "Thanks for your loyalty, but you're actually with Telus now"? What's the gameplan here, Bell?
The long road ahead
Nobody knows what's going to happen—prices, service details, and whether the deal will even get through the CRTC are still up in the air—but one thing's for certain: if you're an outsider buying out the local guy, you'd better be prepared for some dissidence.
And for now, MTS subscribers have some thinking to do—things may not be so pretty when this Bell tolls.