MTS to sell Allstream division to Accelero Capital (disallowed) - Canadian TV, Computing and Home Theatre Forums
 
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post #1 of 10 (permalink) Old 2013-05-24, 11:00 AM Thread Starter
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MTS to sell Allstream division to Accelero Capital (disallowed)

MTS concludes strategic review process with agreement to sell Allstream to Accelero Capital in transaction valued at $520 million.

Allstream is the division that provides communications services to businesses outside of Manitoba. This deal won't have any impact on residential customers in Manitoba.

Quote:
Pierre Blouin, Chief Executive Officer, said, "This transaction makes MTS a stronger, more focused and more valuable company. MTS goes forward as a pure-play telecom with a strong consumer franchise and significant free cash flow to support our dividend. We will also have sufficient capital to invest in wireless spectrum and to continue bringing fibre-to-the-home, 4G LTE wireless technology and other products and services to more communities across Manitoba, further solidifying our position as the undisputed market leader in the province."
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post #2 of 10 (permalink) Old 2013-05-24, 03:08 PM
 
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I wonder if this have any effect on inter provincial long distance rates as I believe that MTS was handing that traffic off to Allstream for transport.

People may remember that MTS was part of the Bell West consortium before the purchase of Allstream and I believe that Bell was doing the long distance.
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post #3 of 10 (permalink) Old 2013-05-24, 05:59 PM
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I used to work for what became Allstream. I stared working for CN Telecommunications, which became CNCP Telecommunications, which became Unitel. I was laid off when Unitel was going bust and CP & Rogers abandoned the company to the banks. AT&T was a minor owner then and they ran things for a while, becoming AT&T Canada, before MTS bought them. The history of the company goes back to some telegraph companies that stared up in the mid 19th century. A.G. Bell borrowed wires from one of those companies, to conduct his first long distance calls, between Brantford and Paris Ont.

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post #4 of 10 (permalink) Old 2013-05-24, 07:15 PM Thread Starter
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Originally Posted by mbhydro View Post
I wonder if this have any effect on inter provincial long distance rates as I believe that MTS was handing that traffic off to Allstream for transport.
I listened to the conference call and an investment analyst asked a similar question about the internet backhaul. MTS said that there long-term agreements in place. I imagine the same would be true for long-distance.
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post #5 of 10 (permalink) Old 2013-05-25, 10:06 AM
 
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Allstream was part of a long-term strategy that didn't really seem to come together. I wonder what the long-game is now. With Allstream, I'd have thought they'd be looking for a foreign buyer wanting to break into Canada. Without Allstream, I see them either hunkering down to be the best little regional player they can be, or looking for one of the Big 3 to buy them out.
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post #6 of 10 (permalink) Old 2013-10-08, 10:14 AM Thread Starter
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Feds Reject MTS Sale of Allstream to Accelero Capital Holdings

The government has nevertheless now made the determination to reject the transaction due to unspecified national security concerns, and has rejected an offer from MTS and Accelero to take whatever actions are necessary to address the government's concerns.

Quote:
As a result of the Allstream sale transaction not being approved, the division will once again be reported as part of MTS Allstream's consolidated results.
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post #7 of 10 (permalink) Old 2013-10-08, 10:22 AM Thread Starter
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Apparently Allstream has a lot of federal and provincial government contracts including servers and back-office operations, which is the reason for the sale being rejected. I wouldn't be surprised if DND and CSIS have Allstream contracts and are concerned about their data ending up in foreign hands.
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post #8 of 10 (permalink) Old 2013-10-08, 07:17 PM
 
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I am sure that its not DND related as Telus says on their website that they are the vendor through 2016 for DND's Global Defence Network Services network ( voice, data, video and IP solutions to DND in Canada and internationally). Unless MTS/Allstream are providing some local loop services for Telus in this contract.

Could it be the Fed Govt is worried about industrial and business information as Allstream has (had) contracts with different financial and business across Canada including Great West Life and Royal Bank.
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post #9 of 10 (permalink) Old 2013-10-09, 11:59 AM
 
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If the government has "security concerns" over the sale of Allstream, perhaps they can compensate MTS for this rejection?
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post #10 of 10 (permalink) Old 2013-10-09, 01:25 PM
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Quote:
Unless MTS/Allstream are providing some local loop services for Telus in this contract
Several years ago, I used to work for Unitel, which is now part of MTS Allstream. One thing that was common then was some customers wanted redundant service. In Ontario that meant they got service from both Bell and Unitel. I worked on one project, for a major bank's data centres. They had duplicate data centres to connect and not only had redundant carriers, each carrier also had to provide redundant paths. So, they had four independent paths between the two sites and a requirement that the four paths did not share any common facilities anywhere. I would expect the government to also have some redundant paths for critical systems. BTW, some of my work was for the RCMP, military and External Affairs. Those bring in a lot of other considerations for security, reliability etc.

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