January 21, 2011 / 8:36 PM / in 7 years

Telus CFO discounts BCE move to buy CTV network

TORONTO (Reuters) - A senior executive at telecom company Telus Corp dismissed the Canadian communications industry’s trend to convergence and questioned the value of rival BCE Inc’s move to own both media content and the means to distribute it.

<p>A Bell Canada office is pictured in downtown Ottawa November 26, 2008. REUTERS/Chris Wattie</p>

BCE Inc, Canada’s largest telecom company and parent of Bell Canada, is seeking regulatory approval for its C$1.3 billion ($1.31 billion) purchase of CTV, the country’s biggest private broadcaster. Including debt, the deal will cost BCE C$3.2 billion.

“Put up your hand if you think we’re at a disadvantage from not levering up our balance sheet to buy content,” Telus’s chief financial officer, Robert McFarlane, asked to laughs from investors at a conference hosted by CIBC World Markets in Whistler, British Columbia, on Friday.

Telus is an odd man out in Canada, where few telecom companies still exist as purely content or distribution providers.

Telecom rival Rogers Communications, which also has major holdings in cable TV, broadcasting and publishing, has given conditional support to BCE’s bid for CTV.

“Does no one look at balance sheets any more?” McFarlane added, saying CTV had historically underperformed and that a conflict existed between the needs of the two sectors.

“Distribution wants to have exclusivity, content wants to maximize the number of eyeballs. There’s an inherent conflict,” he said.

Vancouver-based Telus has a nationwide wireless service built in partnership with Montreal-based BCE and competes fiercely in its home base of Western Canada with cable company Shaw Communications for Internet, landline and television customers.

In October last year, Canada’s communications regulator approved Shaw’s C$2 billion purchase of the television assets of distressed media company Canwest Global.

On the same day, the Canadian Radio-television and Telecommunications Commission (CRTC) said it would review its safeguards against anti-competitive behavior, with submissions due in March. It will consider BCE’s purchase of CTV in February.

BCE’s head of government and regulatory affairs, Mirko Bibic, said his company had a firm understanding of the CRTC’s regulations, which prevent unfair preference being given to a company’s own subsidiaries.

“Given this, it’s highly presumptuous for anyone to suggest that there would be an outright ban on exclusive content rights as a result of upcoming CRTC hearings,” he said in an emailed response to queries.

($1=$0.99 Canadian)

Editing by Rob Wilson

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