Telus, Telus, please come back

July 3 2007 by Ellen Roseman

I don’t normally like it when rivals get together. But I find myself rooting for Telus to make a bid for BCE, now that the way is clear for a hostile takeover.

It makes sense to combine two former monopoly providers of home phone service, one in eastern Canada and one in western Canada. They know each other’s businesses and they can achieve economies of scale in new service offerings. Some of the savings should flow through to customers — at least I hope so.

If “Belus” becomes a dominant player, Ottawa can change the foreign ownership rules to allow more players to come into the telecommunications market. Even now, there’s little competition in some areas.

Cell phone service, for example, is controlled by three companies. Not regulated, they use high-pressure marketing to make customers pay high monthly rates, undisclosed charges and stiff fees to cancel contracts. Wireless is ripe for growth, desperate for innovation, so let’s open the doors to more entrants.

It seems that BCE’s chief executive Michael Sabia and his board rigged the bidding process. They used a short time limit and a tight leash on information to prevent Telus from making an offer. Instead, they commandeered a buyout from the Ontario Teachers Pension Plan, one that would enrich the management team and leave it intact.

I know that many customers and employees aren’t impressed with Bell’s management. They’d like to see more caring and compassion, better training, an allegiance to something other than cost-cutting.

Stephen Jarislowsky, a well-known money manager, isn’t impressed either. Here’s what he told the National Post in today’s column by Diane Francis:

The problem with Bell is that people don’t like dealing with it and haven’t for 30 years so the business is lousy. This company has been high-handed toward customers and has no public-relations manners. It’s not a sinking ship but it’s certainly taking in water.

Getting acquired by a competitor may be a better fit for BCE than being owned by a giant pension fund backed by private equity firms. They’re anxious to turn a profit on their investment by turning the company around.

Darren Entwistle, Telus chief executive, don’t play dead. It’s time to make a hostile takeover offer for Bell Canada. And while you’re at it, you can lobby Ottawa to let more players into the market.

1 comment

  1. Pauline

    Feb 9 2009

    I made the mistake of switching to Telus in Dec 2008 and have had nothing but problems since then with both my internet and TV and trying to get Telus to actually do something to sort the problems out is a major headache. I only switched from Shaw, much to my regret, because I needed to be able to receive collect calls. I would like to see Telus out of business or held accountable for their so-called services and as for customer service – I’ve not met with a great deal of that with Telus. I highly recommend Shaw because I had no problems with them and had they offered the ability to accept collect calls, I’d never have switched.