| Type | Public |
|---|---|
| Traded as | TSX: BCE, NYSE: BCE |
| Industry | Communications Services |
| Founded | 1880, by Charles Fleetford Sise |
| Headquarters | Montreal, Quebec, Canada |
| Key people | George Cope (CEO)[1] |
| Revenue | $18.069 billion CAD (2010)[2] |
| Operating income | $3.672 billion CAD (2010) |
| Net income | $2.159 billion CAD (2010) |
| Employees | 50,662[3] |
| Website | www.bell.ca |
Bell Canada (commonly referred to as Bell) is a major Canadian telecommunications company. Including its subsidiaries such as Bell Aliant, Northwestel, Télébec, and NorthernTel, it is the incumbent local exchange carrier for telephone and DSL Internet services in most of Canada east of Manitoba and in the northern territories, and a major competitive local exchange carrier (primarily for enterprise customers) in the western provinces. Its subsidiary Bell Mobility (including Solo Mobile and Virgin Mobile Canada) is one of Canada's "big three" mobile telecommunications providers, while Bell TV is the country's most popular direct-to-home satellite TV provider. In a majority of its service territory, Bell Canada's principal competition is Rogers Communications. The company, which serves a total of over 13 million phone lines, is headquartered in Montreal, Quebec.[4]
Bell Canada is the one of the main assets of the conglomerate BCE (TSX: BCE, NYSE: BCE), also known as Bell Canada Enterprises. In addition to its core telecommunications operations, BCE owns Bell Media, which operates media properties including the CTV Television Network. BCE also owns 18% of the Montreal Canadiens ice hockey club, and (together with BCE's pension plan) is in the process of purchasing a 37.5% interest in Maple Leaf Sports & Entertainment, owner of several Toronto professional sports franchises.[5] BCE ranked number 262 on the 2011 edition of the Forbes Global 2000 list.[6]
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Historically, Bell Canada has been one of Canada's most important and most powerful companies, and in 1975 was listed as the fifth largest in the country.[7]
Alexander Graham Bell, who resided increasingly for most of his life in Nova Scotia, Canada, received the master patent for the telephone in the United States in 1876 (U.S. Patent 174,465). Bell assigned 75% of the Canadian patent rights to his father, Melville Bell, who, with a friend, Reverend Thomas Henderson, leased pairs of wooden hand telephones for use on private lines constructed by the client from, for example, a store to a nearby warehouse, or from a business to an executive's residence. The two gave a licence to Hugh Cossart Baker, Jr. to lease telephones in Ontario.[8] In 1879, Melville Bell sold the rights to National Bell Telephone Company in Boston, Massachusetts, USA, and thus officially became one of the first regional operating companies of what was to become the Bell System. Charles Fleetford Sise, a Chicago businessman, was brought in as general manager, and The Bell Telephone Company of Canada Ltd. was founded in 1880.[9] With a government-granted monopoly on Canadian long-distance telephone service, The Bell Telephone Company serviced 237,000 subscribers by 1914.
Since the early years of The Bell Telephone Company of Canada, Ltd., it was known colloquially as "The Bell" or "Bell Canada." On March 7, 1968, Canadian law renamed The Bell Telephone Company of Canada, Ltd., as Bell Canada.
Bell Canada originally extended lines clear from Nova Scotia to the foot of the Rocky Mountains in what is now Alberta. However, most of the attention given to meeting demand for service focused on major cities in Ontario, Quebec, and the Maritime Provinces.
During the late 19th century, Bell sold its Atlantic operations in the three Maritime provinces, where many small independent companies also operated and eventually came under the ownership of three provincial companies. Newfoundland and Labrador joined Canada with several private companies, and a government operation that was transferred to the control of Canadian National Railways.
Bell acquired interests in all Atlantic companies during the early 1960s, starting with Newfoundland Telephones (which later was organized as NewTel Communications) on July 24, 1962. Bell acquired controlling interest in Maritime Telephone and Telegraph Company, later known as MT&T, which also owned PEI-based Island Telephone, and in Bruncorp, the parent company of NBTel in 1966. The purchase of MT&T was made despite efforts of the Nova Scotia legislature on September 10, 1966, to limit the voting power of any shareholder to 1000 votes. Bell-owned MT&T absorbed some 120 independent companies, most serving less than 50 customers each. Bell-owned NewTel purchased the CNR-owned Terra Nova Tel in 1988.
Newtel, Bruncorp, MT&T and Island Tel later merged into Aliant (now Bell Aliant which also owns much of what were Bell Canada's more rural areas in Ontario and Quebec) in the late 1990s, in which Bell continues to own a stake.
Independent companies appeared in many areas of Ontario, Quebec and the Maritime provinces without adequate Bell Canada service. Bell went on during the 20th century to acquire most of the independent companies in Ontario and Quebec. Quebec, however, still has large swaths of relatively rural areas served by Telus Québec (formerly Québec Telephone, later acquired by Telus) and Télébec (now owned by Bell Canada via Bell Aliant) as well as some 20 small independent companies. As of 1980, Ontario still had some 30 independent companies, and Bell has not acquired any; the smaller ones were sold to larger independents with larger capital resources.
The three prairie provinces, at separate times, acquired Bell Canada operations and formed provincial utility services, investing to develop proper telephone services throughout those provinces; Bell Canada's investment in the prairies had been scant or insufficient relative to growth, and all three had various local telephone companies. The Alberta government's Alberta Government Telephones Commission and Manitoba Government Telephones purchased the Bell operations of their provinces in 1908. Saskatchewan's Department of Railways, Telegraphs and Telephones, established in June 1908, purchased the Bell operations on October 1, 1909; all three provinces' government operations eventually acquired the independent companies.
Having achieved a high level of development, Manitoba moved to privatize its telephone utility and Alberta privatized Alberta Government Telephones to create Telus in the 1990s. Saskatchewan continues to own SaskTel as a crown corporation. Edmonton was served by a city-owned utility, EdTel, that was sold to Telus in 1995.
British Columbia, served today by Telus, was served by numerous small companies that mostly amalgamated to form BC Tel (the last known acquisition was the Okanagan Telephone Company in the late 1970s), which served the province from the 1960s until its sale to Telus. (The amalgamations produced one anomaly: Atlin is surrounded by the territory of Northwestel, implying that the company that established service there was acquired by a company serving territories further south.)
Although Bell Canada entered the Northwest Territories with an exchange at Iqaluit (then known as Frobisher Bay, in the territory now known as Nunavut) in 1958, Canadian National Telecommunications, a subsidiary of Canadian National Railways, provided most of the telephone service in Canada's northern territories (specifically, Yukon, northern BC and the western NWT). CNR created Northwestel in 1979, and Bell Canada Enterprises acquired the company in 1988 as a wholly owned subsidiary. Bell Canada sold its 22 exchanges in the eastern region of the NWT to Northwestel in 1992, and BCE transferred ownership of the company to Bell Canada in 1999. Northwestel's operating area was in 2001 opened to long distance competition (which has materialized only in the form of prepaid card business, and service to large national customers with some operating locations in the north) and in 2007 to resale of local telephone service (which has not yet occurred).
Northern British Columbia, northeastern Ontario and the James Bay region of northern Quebec were served by independent companies, though Bell Canada eventually provided service in more far-flung reaches of Ontario and Quebec, acquired ownership interests in companies serving large swaths of northwestern Quebec and northeastern Ontario, and in Northwestel.
The Bell System had two main companies in the telephone industry in Canada: Bell Canada as a regional operating company (affiliated with AT&T, with an ownership stake of approximately 39%)[10] and Northern Electric as an equipment manufacturer (affiliated with Western Electric, with an ownership stake of approximately 44%).[10] The Bell Telephone Company of Canada and Northern Electric were structured similarly in Canada to the analogous portions of the Bell System in the United States; the regional operating company (Bell Canada) sold telephone services as a local exchange carrier, and Western Electric (Northern Electric) designed and manufactured telephone equipment.
As part of the consent decree signed in 1956 to resolve the antitrust lawsuit filed in 1949 by the United States Department of Justice, AT&T and the Bell System proper divested itself of Northern Electric and Bell Canada.[11][12][13] Northern Electric renamed itself Northern Telecom in 1976, which in turn became Nortel Networks in 1998 with the acquisition of Bay Networks.
Bell Canada acquired 100 percent of Northern Electric in 1964; starting in 1973, Bell's ownership stake in Northern Electric was diminished through public stock offerings, though it retained majority control. In 1983, as a result of deregulation, Bell Canada Enterprises (later shortened to BCE) was formed as the parent company to Bell Canada and Northern Telecom. As a result of the stock transaction used by Northern Telecom to purchase Bay Networks, BCE ceased to be the majority owner of Nortel, and in 2000, BCE spun out its share of Nortel, distributing its holdings to its shareholders.
Between 1980 and 1997, the federal government fully deregulated the telecommunications industry and Bell Canada's monopoly largely ended. Today Bell Canada itself provides local phone service only in major city centres in Ontario and Quebec.
When Jean Monty assumed the job of CEO in 1998, he pursued a convergence strategy, attempting to combine both content creation and distribution within BCE, and to take greater advantage of the emerging Internet market. BCE Emergis was formed to market e-commerce solutions. Capitalizing on the success of its Internet service provider division, Sympatico, in 1999 BCE formed a partnership with Lycos to create an Internet portal for its customers.
Shortly after the AOL – Time Warner merger, BCE purchased the CTV television network in 2000. In 2001, BCE acquired control of The Globe and Mail, and combined it with CTV and the Sympatico-Lycos portal, its other content creation assets, to form Bell Globemedia. The desired synergies did not occur and the portal was sold back to Bell Canada in 2002. Bell Globemedia was highly profitable, however, and it was spun out as a separate company in August 2006. The new company assumed the name CTVglobemedia in 2007.
In 2000, BCE acquired control of Teleglobe, an overseas carrier coveted by Bell since the early 1980s. The acquisition was a disaster as BCE lost billions of dollars financing Teleglobe. In 2002, BCE sold Teleglobe, and Jean Monty resigned.[14][15] Michael Sabia subsequently assumed the position of CEO.
Michael Sabia refocused BCE on its core telecommunications business, prompting BCE to buy back the 20% share in Bell Canada that it had sold in 1999 to Ameritech (which was subsequently acquired by SBC).[16] BCE also spun off operating units that it did not consider to be core to its business, including Emergis in 2004, and Bell Globemedia and Telesat Canada in 2006.
On February 1, 2006, stating the need to remain competitive, Bell Canada announced job cuts of 3,000 to 4,000 employees by the end of 2006.
On April 28, BCE announced that CEO Michael Sabia was taking a 455% pay increase, his salary being raised from C$1.21 million a year to $6.71 million a year. The pay included a $1.25 million salary, a $2.2 million bonus that Sabia converted to deferred share units, a long-term incentive payout of $3 million and other compensation, the filing shows. Bell Canada also posted record revenue increases for the previous fiscal year.
Under pressure from investors, on October 11, 2006, BCE announced it would be wound down, with its remaining assets converted to an income trust. The new entity was planned to be named "Bell Canada Income Fund". As part of this restructuring, Bell Aliant offered to take Bell Nordiq private, while remaining separate from the new Bell trust.[17] Due to announced changes in taxation law by the Canadian federal government, on December 12, 2006, BCE announced it would not proceed with its planned conversion to an income trust. It had planned to restructure, eliminating the BCE holding company,[18][19] but this was put on hold due to attempts to privatize the company.
On April 30, 2007, the Canadian Radio-television and Telecommunications Commission (CRTC) announced its decision to allow pay phone rates for Bell Canada, Telus, Bell Aliant, SaskTel, and MTS Allstream to increase from 25 cents to 50 cents, starting as early as June 1. The CRTC also permitted local rural rates to increase by the lesser of the annual rate of inflation or five percent, and removed price caps on optional rural services, such as call display and voicemail.[20] On June 2, 2007, Bell Canada increased the cost of a local pay phone call to 50 cents when paid in cash and one dollar when paid by calling card or credit card,[21] Bell's first increase in pay phone rates since 1981.[20]
Due to its stagnant share price, starting in April 2007, BCE was courted for acquisition by pension funds and private equity groups, including a consortium led by the Canada Pension Plan Investment Board (with Kohlberg Kravis Roberts as one of the participants), a consortium led by the Ontario Teachers' Pension Plan, and a consortium that included Cerberus Capital Management.[22]
On June 30, 2007, BCE accepted a bid of $42.75 per share in cash, for a total valuation of $51.7 billion, from the group led by the Ontario Teachers' Pension Plan, and including Providence Equity Partners, Madison Dearborn Partners, Merrill Lynch Global Private Equity, and Toronto-Dominion Bank. The proposed deal would have been the largest acquisition in Canadian history and the largest leveraged buyout ever.[23][24] The deal was approved by BCE shareholders,[25] Quebec Superior Court[26] (whose ruling was overturned by the Quebec Court of Appeal,[27] but was later upheld by the Supreme Court of Canada[28]), and the CRTC, subject to certain conditions for its corporate governance structure to ensure that Bell remained under Canadian control.[29]
Due to the tightening of the credit market caused by the subprime mortgage crisis, the investment banks financing the deal—led by Citigroup, Deutsche Bank and the Royal Bank of Scotland—started negotiations on May 16, 2008, to revise the terms of their loans with higher interest rates and greater restrictions to protect themselves.[24] On July 4, 2008, BCE announced that a final agreement had been reached on the terms of the purchase,[30] with all financing in place, and Michael Sabia left BCE, with George Cope assuming the position of CEO on July 11.[1]
On November 26, 2008, BCE announced that KPMG had informed BCE that it would not be able to issue a statement on the solvency of the company after its privatization, one of the required conditions of the buyout. As a result, the purchase was cancelled.[31][32]
With Shaw Communications purchasing the Global Television Network, Vidéotron launching its wireless telephone network with video content as a key selling point,[33] and the enormous popularity of wireless and Internet video and other media streams at the 2010 Vancouver Olympics,[34] Bell once again sought to bring a content provider into its portfolio. In September 2010, Bell announced a deal to reacquire full control of the broadcasting properties owned by CTVglobemedia including the CTV Television Network. The other major asset of CTVglobemedia, The Globe and Mail, will be 85% owned by the Thomson family, with Bell retaining its 15% interest.[35] Through this acquisition, Bell responded to an increasing trend away from traditional cable and satellite delivery channels and towards new distribution methods over the Internet and wireless networks.[36] The CRTC approved the transaction in March 2011.[37]
Bell Canada has been criticized in a similar matter to Comcast in America, on its policies for bandwidth throttling, censorship, misleading prices and usage-based billing.
Bell Canada provides many different types of telecommunications services.
Bell Canada provides standard voice service. They formerly offered VoIP to customers, branded as "Digital Voice". Businesses can still obtain VoIP service.
Bell Home Phone and Bell Mobility provide voicemail service as an optional feature for residences and businesses. Bell Prepaid and Solo Mobile pay-per-use customers, however, receive a basic voice mail at no additional charge. The complimentary voice mail can store 5 messages of one minute each, for up to five days.
Bell Mobility operates a cellular network in all Canadian provinces. It also owns the entirety of Virgin Mobile Canada as of May 2009[update]. While it created the Solo Mobile brand in 1999, Bell shut down all standalone Solo stores in 2011 while discontinuing third-party sales of all Solo phones in November 2011. The brand continues to be active for its current customers, but there are no incentives to encourage new subscriptions.
Formerly known as ExpressVu, Bell TV is a satellite television service provider. There is also a mobile TV service, Bell Mobile TV, and an IPTV service, Bell Fibe TV. The latter is currently only available in Toronto and Montreal.
Bell Internet provides high speed DSL Internet service in many areas where it offers phone service. DSL is offered in various speeds ranging from 500 Kbit/s to 25 Mbit/s download and 256 Kbit/s to 7 Mbit/s upload, depending on what the local infrastructure can support.
Bell began offering Fiber-to-the-node Internet access to some subscribers in 2010. Bell markets this service under the name "Fibe".[38] Fibe regions can access all speeds in some cases, but some Fibe regions can only obtain 16 Mbit/s down and 1 Mbit/s up. Non-Fibe regions are limited to legacy DSL technology, supporting speeds of up to 7 Mbit/s down and 1 Mbit/s up.
Bell used to offer Bell Home Monitoring, also known as Bell Gardium. Competitor Rogers Communications recently launched its Smart Home Monitoring service. It is unknown if Bell will launch a similar service.
BCE operates Bell Media, one of Canada's largest privately held media companies which owns the Canadian television networks, CTV and CTV Two, along with 30 speciality television channels, Bell Media Radio which operates 35 radio stations across Canada and sympatico.ca. It also operates retail stores, as simply the Bell Store (formerly BellWorld in English Canada and Espace Bell in Quebec, and prior to 1999, Bell Phonecentre/Téléboutique Bell).
BCE also bought The Source by Circuit City (which was renamed after the sale to The Source) and all assets of InterTAN from bankrupt Circuit City.
In July 2006, Bell and former subsidiary Aliant completed a restructuring whereby Aliant, renamed Bell Aliant Regional Communications, took over Bell's wireline operations in much of Ontario and Quebec (while continuing to use the "Bell" name in those regions), as well as its 63% ownership in rural lines operator Bell Nordiq (a publicly traded income trust that controls NorthernTel and Télébec). These are in addition to Bell Aliant's operations in Atlantic Canada. In turn, Bell has assumed responsibility for Bell Aliant's wireless and retail operations. Bell Aliant, now itself an income trust, is currently 44% owned by Bell.[39] Other company assets include Western Canada CLEC Bell West. BCE partially or fully owns 17 companies in the fields of telecommunications, media, and information technology.
Shifting its focus to IP, Bell has in recent years deployed MPLS on their nationwide fibre ring network to support consumer and enterprise-level IP applications, such as IPTV and VoIP.
Bell Canada created the Frank and Gordon beavers to advertise its products from 2006 to 2008.
Coinciding with its advertising campaign as part of its sponsorship of the 2008 Beijing Olympics, Bell introduced a new logo and minimalist ad style, with the slogans "Today just got better" (with emphasis on the suffix "er") in English Canada and "La vie est Bell" (a pun on "La vie est belle" — French: life is beautiful) in French Canada.[40] The font used in Bell's marketing is a custom typeface known as 'Bell Slim', by Canadian typeface designer Ian Brignell.
Current members of the board of directors of BCE are:[41] Thomas O'Neill (chair), Barry Allen, André Bérard, Ronald Brenneman, Sophie Brochu, Robert Brown, George Cope, Anthony Fell, Edward Lumley, Jim Prentice, Robert Simmonds, Carole Taylor, and Paul Weiss.
Former BCE units:
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