Business Report

Bell Canada
Filled with Doors
By Courtney Semmler

Bell Canada is a major telecommunications company throughout Canada. It has continually moved forward for a better communicational future. Bell Canada has improved greatly on its popularity and more importantly their improving devices. There operations are successful and 4.9 million people within Canada subscribe wireless to Bell Canada. In the 3rd quadrant of Bell Canada, it grew to 1.7 million subscribed to their internet. It hosts 13 million phone lines in Canada.

Alexander Graham Bell, who mostly vacationed in Nova Scotia, inspired the idea of building a company that focused on telecommunications. Alexander is known as the founder of the great telecommunication technology, the telephone. He received a US patent in 1877 allowing him to completely own his new device, meaning that no other person or company could steal, offer to sell, or make their own telephone. This patent allowed Alexander to have his rights to license, mortgaged, sell to another company or assign to whom ever he pleases without any other competition. He decided to assigned 75% of the Canadian patent rights to his father, Alexander Melville Bell, his father. Melville used this offer and sold hand made wooden telephones to customers that wished to have quick communications to one certain destination, like a store to a local company.
In 1879, Melville decided to sell his 75% of the Canadian patent rights to a National Bell Telephone Company in Boston, Massachusetts. This company was the first official company to become the Bell System. The National Bell Telephone Company then assigned some of it’s patent rights to a Chicago businessman named Charles Fleetford Sise, whom soon became general manager within the Bell Company. Charles took his rights and used them towards the Canadian economy and began to develop an “offspring” from the National Bell Telephone Company. In 1880, The Bell Telephone Company of Canada Ltd was founded in Montreal, Canada. On March 7th 1968, The Bell Telephone Company of Canada Ltd name was officially changed to what we know now Bell Canada.

Within June 2007, Bell Canada announced that that it was privatizing with Teachers’ Private Capital and Providence Equity Partners. Privatizing meaning that Bell Canada’s new suitor to of Bell Canada’s shares was going to be run by a private sector, not a public sector; government functioned like revenue collection and law enforcement. This pension is Bell Canada’s largest shareholder. At the end of March 2007, Bell Canada gained 43.8% of shareholders, so with this new pension with the Teacher’s Private Capital and Providence Equity Partners, Bell Canada will sky rocket with it’s strive to increase shareholders. This share between the Teachers’ Private Capital and Providence Equity Partners would raise Bell Canada’s shares to 41 cents, or 1.1%, to $37.38.
During the same month, Bell Canada also opened another path to a greater success. The talks were about a possible combination with Canada’s 2nd leading telecom, Telus. If this passed, shares of Bell Canada would jump 77 cents, or 2.1%, to $37.54. Although it may be a benefit to Bell Canada, it may not be all so great for Telus. Investors believe that the value the deal would create for Telus would negatively affect the company. They believe that Telus shares would drop 93%, or 1.5%, to $59.80. Not good at all. Darren Entwistle, Chief Executive of Telus, begs to differ. He believes that there would be no such drastic problems. He believes that merging with Bell Canada would “be an all- Canadian solution for both immediate and long-term value creation, while ensuring a vibrant player continues in this increasingly competitive industry.” – Darren Entwistle.

It is not clear what Bell Canada has decided to deal with. Many investors wish that Bell Canada merge with Telus. Bell Canada has already privatized with Teachers’ Private Capital and Providence Equity Partners, as those are its largest shareholders.

A ‘Do Not Call’ list now exists since the day of December 21st, 2007 hit. Bell Canada was the only company within Canada that agreed to all the terms that The CRTC (Canadian Radio-television and Telecommunications Commissions) requested for proposal. The CRTC openly allowed any company to adopt and create their own ‘Do Not Call’ List, but no other company besides Bell Canada bid into the deal. After CRTC announced the agreement between them and Bell Canada, CRTC awarded Bell Canada a five-year contract which allowed Bell Canada help those Canadians who wish not to be contacted by telemarketing firms. The contract will be officially launched by September 30th, 2008. Bell Canada will be responsible for registering phone numbers, providing the telemarketers with updated Do Not Call lists and will be responsible for receiving consumer complaints about telemarketer complaints. This ‘Do Not Call’ List would have a great impact on Bell Canada’s popularity as so many subscribers would not want to be bothered by CRTC’s telemarketers.

For many years, Bell Canada has always been ‘on top’ of everything and the most trusted throughout Canada as a telecommunication company. Although, it seems as though it’s traditional ways of always being the strongest in the country are about to change. Normally Bell Canada has a very deep balance sheet, meaning that both its strategies and abilities are strong and what ever the negative shocks or positive shocks that the company takes in will not affect the company too greatly, but allowing the company go into complete debt in numbers of $44 billion with their largest shareholder, the Ontario Teachers’ Pension Plan. This is significant and will allow other companies to step in and take over the placement of the leading telecommunication company in Canada. The Rogers company is definitely taking advantage of this opportunity as Rogers is Bell Canada’s major competitor. As Rogers ‘foe’, Bell Canada, is struggling to stay organized and “keeping itself on the rails” – Andrew Wahl, Ted Rogers, owner of Rogers company, rolls in and takes great advantages on it’s subscribers. In fact, Rogers’s stock went up 25%. It is said that Ted Rogers’s personal wealth rose 67% to $7.6 billion. In the past, Rogers always was known as the company that brushed bankruptcy, they had a weak balance sheet. The irony of Rogers luck was that when Bell Canada took a fall, Rogers at that point had an investment-grade balance sheet, allowing the to be more organized and not brushing bankruptcy. As long as Bell Canada tripped, fell and now can’t get back up, Rogers will take the lead in Canada.

Bell Canada has had many successes within its lifetime. But also has had many mistakes that have not yet been corrected. Due to its state right now, hopefully it will stand on its own two feet again and continue having its greatest successes in the future.

This long and on going blur is my Business Report about Bell Canada. I was impressed with myself that I wrote this much about Bell Canada. I learned a lot about Bell Canada; where they came from and how they came to be. It was painful to write this much. A lot of research was put into this article and it helped me improve my writing skills (I think) research capabilities.