TORONTO (Reuters) - Only three years after joining BCE Inc (BCE.TO)(BCE.N) as the president of its core Bell Canada phone company unit, George Cope is poised to take the helm of the company once its C$34.8 billion ($34.1 billion) buyout closes.
A decision by Canada’s Supreme Court, announced on Friday afternoon, thwarted a challenge to the deal and brings it a step closer to completion, though it is by no means assured of closing. But either way, Cope will assume a pivotal role in shaping BCE’s direction.
While Cope’s tenure at BCE may be relatively short, he is no novice. The man picked to steer Canada’s biggest telecom company out of the public limelight and support its first steps as a private company is an industry veteran.
Before he joined Montreal-based Bell Canada in 2005, Cope spent five years as president and CEO of Telus Mobility, the wireless unit of Telus Corp (T.TO), a huge BCE rival and Canada’s No. 2 phone company.
Before that, he led Clearnet Communications for 13 years before the national wireless carrier was bought by Telus in 2000.
Cope, 46, holds an honors degree in business administration from the University of Western Ontario in London, Ontario. He is married with three children.
“He has to hit the ground running,” said Carmi Levy, an industry analyst at AR Communications, about Cope’s upcoming ascent to BCE’s top job. “He has to convince all stakeholders that he’s going to turn BCE into a contender in an increasingly tumultuous telecommunications market in Canada.”
His appointment, which the company and its private-equity buyers announced last October, was widely expected by investors and analysts.
The fact that an executive with his extensive background in wireless operations has been chosen to head the company highlights the area where BCE’s new owners see much value.
Wireless has been viewed as the driver of telecom firms’ growth, particularly as customers become more comfortable using lucrative data services such as text-messaging and movie and music downloads on their cell phones.
Cope’s two decades of experience could prove crucial as BCE jostles for wireless market share with Telus and leader Rogers Communications Inc (RCIb.TO).
Also, a government auction of airwaves over which wireless services are delivered is entering its final stages. Since the government has set aside a significant portion of spectrum for bidding exclusively by potential new entrants, a new competitor to BCE, Telus and Rogers could emerge.
Cope will have to ensure BCE continues to hold its own against Telus and Rogers, while at the same time keeping a watchful eye on any newcomers.
When the Ontario Teachers’ Pension Plan last year launched the process that eventually led to BCE’s proposed sale, analysts say it was unhappy with the company’s stagnant performance and stock price under the leadership of then-CEO Michael Sabia.
Some observers have argued Cope will have to make broad changes at Bell to make it leaner and more efficient so that it can deliver the results and returns that its new private-equity owners will demand.
“He needs to make some significant moves in the next few months,” said Iain Grant, managing director at SeaBoard Group, a telecom consulting firm. “One hopes that George will use the opportunity to make the significant changes to Bell that need to be done.”
Among the tasks facing Cope could be a shedding of underperforming assets such as its ExpressVu satellite television unit.
ExpressVu has experienced staid growth and late last year analysts said BCE’s new owners could sell the division. Others, however, pointed out that ExpressVu may have to stay despite weak performance.
That’s because it lets BCE compete with cable firms like Rogers in offering bundle deals that combine phone and Internet services with television.
As well, the market will look for indications as to where -- and how much -- BCE will plan to invest in new technology under Cope’s leadership.
“He’s got some technological challenges in keeping pace with Rogers and Telus both in broadband and wireless infrastructure,” Levy said, adding Cope will have to spend to “keep Bell in the game.”
Grant said that in any case, the new CEO’s moves will have to be bold and sure-footed.
“The time for half measures and baby steps has passed.”
Reporting by Wojtek Dabrowski; editing by Frank McGurty