Bell Canada: Now What?
With Bell Canada being snapped up for $52-billion, what’s next for Canada’s largest telecom carrier? Here’s five predictions:
1. Extensive Job Cuts: With Bell Canada burdened by debt, the private equity investors are going to look for ways to increase cash flow. No better way than cutting thousands of jobs despite the fact there have already been extensive layoffs in recent years.
2. The overhaul of Bell Mobility: The wireless business are been a stinker over the past two to three years, highlighted by billing problems, low subscriber growth compared with rivals Telus and Rogers; and the missed opportunity to buy Microcell Telecommunications for a measly $1.4-billion in 2004. The wireless business needs a completely new strategic focus, which may mean yet another executive overhaul. Look for the business to be IPO-ed once it starts to rebound.
3. IP-TV either flies or dies: Bell’s IP-TV strategy has gone nowhere in recent years while cable rivals have surged ahead into the local phone business. Bell needs to decide whether it wants to go high (invest aggressively to launch IP-TV to millions of households) or go home (walk away from IP-TV because it will require too much capital spending at a time when cash flow will be king)
4. Local phone business continues to crumble: Without an IP-TV product, there’s no way Bell can compete with Rogers, Videotron or Cogeco in the multi-service bundle business. As a result, the number of local customers leaving Bell will continue to gain momentum. Solution: Go aggressive on VoIP, which Bell has been reluctant to do because it’s afraid it could cannibalize its high-margin local business.
5. Senior management shuffles: Okay, CEO Michael Sabia has apparently managed to keep his job - and a $31-million pay out in the process. With Bell needing to perform much better, look for many other executive to be shuffled out.
Note: There are reports the takeover battle is far from over. But regardless of who eventually buys Bell Canada, these predictions remain intact. 
July 3rd, 2007 at 2:08 pm
You missed a couple of zero’s
= 52 Billion, not million..
But yeah, it is a rudderless sinking ship - with some foresight they could own the telco landscape by moving toward a Voice 2.0 initiative, but even with new ownership I don’t think they see the forest for the trees.
July 3rd, 2007 at 3:26 pm
5 Solutions to accompany your 5 predictions
1) Sabia/Cope out - Stephen Wetmore in and don’t hire any senior execs who have not had a very broad telecom experience not just one specialty like wireless
2) Kill the “Business Unit” (BU) structure - massive duplication,cost, inefficient deciion-making. Return to the geographic structure - “Bell Quebec”, “Bell Ontario”, “Bell West”. Historically, this is likely when Bell is most efficient.
3) Fold Quebec/Ontario portions of Bell Aliant back into Bell
4) Kill the outsourcing, then, actualy “Fix” the billing and most of all “Customer Service” issues - which have been a festering wound.
5) Remember what the “Bell” brand really means and learn your “M&M’s” - Marketing and Motivation
Your right - the bidding is probably not over and, that so-called “bidding process” should be carefuly scrutinized - and how can you justify a break fee that high?
July 3rd, 2007 at 4:05 pm
Mark I wanted to speak with you and found you here. I think we met at Third Tues? anyways I am on facebook - sonja socially - could you get in touch with me there. Cheers
July 4th, 2007 at 9:54 am
No doubt Wetmore is more than capable. The question is whether the new investors (whoever they end up being) will want to bring in new blood. That said, Wetmore did an impressive job in Eastern Canada.
July 4th, 2007 at 12:31 pm
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