Bell Canada and Manitoba Telecom Services Inc. Thursday formed a $1 billion company called Bell West Inc. to address Western Canadian business markets and make some headway
against main competitor Telus Corp.
Bell West comprises the assets of Bell Intrigna and the Alberta and British Columbia offices of Bell Nexxia. Intrigna, a joint venture launched by Bell Canada and MTS almost three years ago, was designed to capture the small and medium business market. Nexxia, also formed in 1999, provides enterprise-size companies with data and Internet broadband IP solutions.
The new company will be headquartered in Calgary and will inherit Intrigna’s staff of 650 and Nexxia’s 50 employees (mostly sales staff) located in its Western offices.
“”As one company, we’ll be able to draw more effectively on the strength on both the Intrigna and Bell Nexxia organizations,”” said Randy Reynolds, who has been named as Bell West’s CEO. “”We can focus on delivering a truly seamless interface to our customers.”” Reynolds was previously CEO for Bell Nexxia, and before that for Bell Mobility.
MTS exchanged its majority two-thirds ownership in Intrigna for a 40 per cent stake in Bell West. “”For MTS this represents a smaller piece of a much bigger pie and a strategic move to build continued growth,”” said MTS president and CEO Bill Fraser.
Bell Canada has long recognized the need for a change in its Western operations, according to president John Sheridan, and has been in talks with MTS for some time about the transformation.
“”Over the past year or so we’ve come to grips with the reality that we had to find more of a win-win model instead of going forward with the overlap between Nexxia and Intrigna and some of the internal issues that has caused,”” he said. Sheridan will join Bell West’s board of directors as chairman.
The combination of Intrigna and Nexxia will provide one point of contact for Bell’s Western customers of all sizes, said Reynolds. The goal of the new company will be to achieve $400 million in revenue by the end of this year and double its market share over the next three to four years.
That’s a realistic goal, said Jeremy Depow, telecommunications analyst with Ottawa-based research firm Yankee Group in Canada, if only because Bell is starting from such a weak position against Telus. Toronto-based IDC Canada Ltd. estimates Telus’s market share in the provinces it operates in to be close to 98 per cent.
“”It will take some time, but certainly they’re (Bell) in a hell of a lot better position now,”” said Depow. “”Certainly to leverage MTS and to streamline all the resources there is a positive thing. They will try to use this as a way to make themselves more efficient as a way to knock off some of Telus’s customer base. With Bell’s muscle, it has some opportunity there.””
Bell West will attempt to present a viable alternative to Telus in wireline, voice, data and IP communications services and, according to Reynolds, sees some opportunity to manage customers’ voice and data networks through outsourcing agreements.
The company plans to be aggressive with Telus on price, but Intrigna and Nexxia customers won’t see an immediate change under the joined entity, said Sheridan. “”We’ll see that battle played out in the marketplace over the next couple of years.””
Bell Canada will further expand its presence in Western Canada with a new call centre to be located in B.C., added Sheridan.
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