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Bell Canada

Bell Canada's headquarters located in Montreal, Quebec.

Bell Canada (commonly referred to as Bell) is a Canadian telecommunications and media company headquartered in Montreal, Quebec. Including its subsidiaries such as Bell Aliant, Northwestel, T l bec, 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 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 providess direct-to-home satellite TV service. Bell Canada's principal competition is Rogers Communications in a majority of its service territory. The company, which serves a total of over 13 million phone lines, is headquartered at the Campus Bell complex in Montreal, Quebec.[1]

Bell Canada is one of the main assets of the conglomerate BCE Inc. (, ), 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.[2] BCE ranked number 262 on the 2011 edition of the Forbes Global 2000 list.[3]

Contents


History

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.[4]

Inception

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In the later 19th century Alexander Graham Bell designed an analog electrical telecom device that could simultaneously transmit and receive human speech in "real time" and in 1876 successfully patented the device as the "telephone" in the United States (). Bell also patented the telephone in Canada and transferred 75% of the Canadian patent rights to his father, Alexander Melville Bell. For a few years, the senior Bell along with Thomas Henderson collected royalties from the lease of telephone hardware to customers in the limited late 1870s Canadian market who either operated their own personal network infrastructure or subscribed to a third party telecommunications service provider.[5]

In 1879 the younger Bell's father sold all Canadian rights to National Bell Telephone Company formed in Boston, Massachusetts earlier that year by the merger of Bell Telephone Company and International Bell Telephone Company, which in 1880 reorganized as the American Bell Telephone Company, initiating the Bell System. That same year the Canadian division was renamed The Bell Telephone Company of Canada Ltd. and headed by U.S. executive Charles Fleetford Sise from Chicago who served as its first general manager.[6]

The first supplier of telephones to Bell was a company established by Thomas C. Cowherd and his son James H. Cowherd, in a three story brick building in Brantford, Ontario, creating Canada's first telephone factory. Thomas and James had been good friends of Alexander Graham Bell and had provided stovepipe wire with which he conducted early experiments in Canada.[7] By 1881 the Brantford factory had manufactured 2,398 telephones to Bell's specifications.[8] With a government-granted monopoly on Canadian long-distance telephone service, The Bell Telephone Company of Canada was serving 237,000 subscribers by 1914.

Since its early years The Bell Telephone Company of Canada, Ltd. had been known colloquially as "The Bell" or "Bell Canada." On March 7, 1968, Canadian federal legislation renamed The Bell Telephone Company of Canada, Ltd. to Bell Canada.

Competition and territory reduction

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.

Atlantic Canada

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.

Quebec and Ontario

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 Qu bec (formerly Qu bec Telephone, later acquired by Telus) and T l bec (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.

Alberta, Manitoba and Saskatchewan

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, Edmonton Telephones Corporation, that was sold to Telus in 1995.

British Columbia

British Columbia, served today by Telus, was served by numerous small companies that mostly amalgamated to form British Columbia Telephone Co. (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.)

Northern Canada

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.

Divestiture and deregulation

Bell Canada logo used from 1977 until December 7, 1994.[6] 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%)[9] and Northern Electric as an equipment manufacturer (affiliated with Western Electric, with an ownership stake of approximately 44%).[9] 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.[10][11][12] 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.

Convergence strategy / Internet boom and bust

BCE corporate logo used until August 2008
BCE corporate logo used until August 2008
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.[13][14] Michael Sabia subsequently assumed the position of CEO.

Post Teleglobe: Refocus on core business

Bell Canada logo used from December 8, 1994 to 2008.[6] 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).[15] 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.[16] 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,[17][18] 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.[19] 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,[20] Bell's first increase in pay phone rates since 1981.[19]

Privatization target

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.[21]

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.[22][23] The deal was approved by BCE shareholders,[24] Quebec Superior Court[25] (whose ruling was overturned by the Quebec Court of Appeal,[26] but was later upheld by the Supreme Court of Canada[27]), and the CRTC, subject to certain conditions for its corporate governance structure to ensure that Bell remained under Canadian control.[28]

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.[23] On July 4, 2008, BCE announced that a final agreement had been reached on the terms of the purchase,[29] with all financing in place, and Michael Sabia left BCE, with George Cope assuming the position of CEO on July 11.[30]

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]

Convergence and consolidation, round two

With Shaw Communications purchasing the Global Television Network, Vid otron 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]

Criticism

Bell Canada has been the centre of much criticism due to its policies for bandwidth throttling of BitTorrent traffic across its network,[38] censorship, misleading prices and usage-based billing.

Services

Service van with current Bell Canada logo

Service van with previous Bell Canada logo
Service van with previous Bell Canada logo
Bell Canada provides many different types of telecommunications services.

Voice

Bell Canada provides standard voice service. They formerly offered VoIP to customers, branded as "Digital Voice". Businesses can still obtain VoIP service.

Voicemail

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.

Wireless

Bell Mobility operates a cellular network in all Canadian provinces. It also owns the entirety of Virgin Mobile Canada . 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.

Television

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 available in the Greater Toronto Area, Montreal and Qu bec City.

Internet access

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".[39] 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 Canada has now rolled out Fibre to the Home services to subscribers across Eastern Canada, this service can provide guaranteed download and upload speeds of 175 Mbit/s.

Legacy

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.

Assets

Current BCE corporate logo
Current BCE corporate logo
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/T l boutique 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 T l bec). 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.[40] 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.

In March 2012 BCE announced the takeover bid of Astral Media for 3.3 billion dollars. It requires CRTC approval and Competition bureau approval to be able to close.[41]

Marketing

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"  ) in French Canada.[42] The font used in Bell's marketing is a custom typeface known as 'Bell Slim', by Canadian typeface designer Ian Brignell.

Bell purchased Astral Media, a radio and television broadcasting corporation, on March 15, 2012 for 3.38 billion dollars.

Corporate governance

Current members of the board of directors of BCE are:[43] Thomas O'Neill (chair), Barry Allen, Andr B rard, Ronald Brenneman, Sophie Brochu, Robert Brown, George Cope, Anthony Fell, Edward Lumley, Jim Prentice, Robert Simmonds, Carole Taylor, and Paul Weiss.

See also

  • American Telephone & Telegraph, AT&T, an earlier parent and successor to American Bell
  • Bell Centre, a hockey arena in Montreal
  • Bell Mobility, the division of Bell Canada which sells wireless services in Canada
  • Bell System, the Bell Telephone / AT&T-led companies which provided phone services
  • Bell Tower, a skyscraper in Edmonton
  • International Bell Telephone Company, the Bell Telephone's early European division
  • National Bell Telephone Company, the very earliest parent company
  • Telephone Pavilion (Expo 67), also known as the Bell Telephone Pavilion

Former BCE units:

  • Nortel  formerly Northern Telecom and Northern Electric
  • Teleglobe Canada Inc  now VSNL International Canada

References

External links

de:Bell Canada fr:Bell Canada ja: pl:Bell Canada






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