Over the last two days, I have been attending a telecom seminar. Several interesting presentations have sparked ideas. I will blog of a few as they occur to me.
Peter Rhamey of TMT Advisors discussed many of the macro trends facing the industry. There are many. One of the more interesting is the urban versus rural telecommunication scenario. On November 4, 2014, BCE (parent of Bell Canada) closed the deal to buy out minority shareholders of Bell Alliant, see http://www.bce.ca/investors/shareholder-info/bell-aliant-privatization. Bell Alliant has a much larger proportion of rural customers than does Bell Canada. This could lead one to believe that Bell wanted to focus its energy on the rural customer. In fact, reports indicate that BCE really wanted to use the stable cash flow from Bell Alliant to fund Bell Canada’s heated efforts to battle mobile and urban competitors such as Rogers Communications in Ontario and Videotron in Quebec. Bell’s rural strategy is being distracted.
Could this result in an opportunity for smaller independent telcos and others who are willing to focus on the rural customers to attack Bell Canada?
In the US, Verizon Communications is even more focused on redirecting assets out of rural. They have recently announced the sale of another $10B of assets to Frontier Communications Corp., http://www.reuters.com/article/2015/02/05/us-verizon-comms-divestiture-idUSKBN0L900520150205
The future for the rural telcos looks good indeed.