Union concerned over Bell expansion into United States

A union representing thousands of BCE Inc. employees is concerned that the Canadian telecom and broadcasting giant is expanding into the United States. In early November, Bell announced plans to purchase Ziply Fiber, operating in the Pacific Northwest of the U.S. The move worries Lana Payne, national president of Unifor, the union which acts on behalf of both telecom and broadcast workers at Bell. “I think the biggest concern our members have is, where is this company headed right now?” she told The Wire Report in an interview. There have been layoffs of staff at Bell, and in September, the conglomerate sold its share of Maple Leaf Sports and Entertainment – owners of the Toronto Maple Leafs and Toronto Raptors sports teams – to Rogers Communications Inc. for $4.7 billion. At the time of the sale, Bell indicated it planned to put the money toward reducing its debt levels and supporting its “ongoing transformation from telco to techco.” READ MORE: - Rogers buys Bell’s stake in Maple Leaf Sports and Entertainment for $4.7B - Bell acquires U.S. telecom; Eastlink buys in Northern Ontario Now, using the proceeds of the Maple Leaf sale to purchase Ziply creates uncertainty, Payne states. She wonders about the wisdom of a North American strategy with increased investment south of the border. “Overall, are we going to be focusing on Canada now, does Bell have a different strategy in which they expect to focus more or spend half of their time building up the company in the United States?,” she questioned. “And if that’s the case, what does this also mean for the pressure that will be felt by regulators to open up, obviously, the Canadian market to U.S. entities to come here?” Ziply was not the first target in Bell’s sights. The Globe and Mail reported on Nov. 8 that Bell initially put in a bid for Frontier Communications Parent Inc. of Dallas but was rebuffed, with American telecom Verizon Communications Inc. ultimately winning that bidding war. A spokesperson for Bell says the Ziply purchase is part of a transition for the company. “This is an investment in Bell’s long-term strategy that will accelerate our growth trajectory – which will ultimately benefit team members and customers in both Canada and the United States,” the spokesperson stated. “Bell will continue to build new fibre across our Canadian footprint with the goal of reaching 8.3 million fibre locations by the end of 2025.” Ziply will continue to employ its current leadership and will operate as a separate business unit within Bell, the spokesperson added. The markets have been lukewarm to the BCE moves. The firm’s stock price dipped following the Ziply announcement. Bell announced the same day as the purchase that it was pausing common share dividend increases. Bell CEO Mirko Bibic expressed optimism over his company’s acquisition of Ziply Fiber during the company’s quarterly earnings conference call earlier this month – emphasizing its potential as a “great growth opportunity” right in Bell’s “swim lane.” “If other opportunities come up, we’ll take a look,” Bibic told analysts, noting that with Ziply under its belt, the company could consolidate and merge it with “other assets” in the future. Bell reported a net loss of $1.19 billion for the third quarter of 2024, a substantial drop from profits of $707 million during the same period last year. The company blamed it on a $2.1 billion non-cash impairment charge related to its Bell Media TV and radio properties, which CFO Curtis Millen said reflects “continued market related pressures on the traditional advertising ecosystem.” Overall revenue was $5.97 billion, a 1.8 per cent decline from last year’s $6.08 billion. ppark@thewirereport.ca With a file from Phalen Tynes-MacDonald

Union concerned over Bell expansion into United States

Telecom |
By Paul Park
| November 25, 2024

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