MTS Allstream still analyzing auction strategies

MTS Allstream Inc. isn't tipping its hand regarding potential auction strategies, despite rules that explicitly allow for the entry of new national wireless competitors. Industry Canada set aside 40 MHz of spectrum for new entrants and mandated roaming and tower sharing in its auction framework released on November 28. Speaking during the company's 2008 conference call and webcast, president and CEO Pierre Blouin said it's still too early to make a decision one or the other whether MTS will enter the auction. "We believe the opportunity is significant and has the potential under the right circumstances to create long term value for our shareholders. What I can say is that based on preliminary review the auction rules should permit a new entrant to be competitive with significantly less committed capital than assumed in the past," he said. The MTS chief executive noted that rules for mandated roaming and tower sharing also create an environment that is considerably different than what existed when new competitors entered the market in the late 1990s. He said it opens the door to several scenarios. "Opportunities to partner with financial and/or strategic players as well as to collaborate with other new entrants also open up a range of potential strategies for bringing forward a compelling customer value proposition that also makes sound business and financial sense," Blouin said. Insiders speculate that MTS will partner with Quebecor Media Inc.'s Vidéotron ltée to become a national provider able to compete with the existing three national operators. While Blouin said much work must be done before the company can make an announcement, he concedes that a decision could come by March 2008 when auction deposits are due. "It's going to time to analyze the rules and complete the evaluation of the various financial and partnering models that are in front of us," he maintained. "There's a lot of discussion also to be had with potential partners, so we're going to take the time that it's going to take us to evaluate the various options." If MTS decides to expand its regional wireless business either through a partnership or on its own, it can leverage existing lines of business. "It would not be a brand new venture starting from scratch, there's a lot of assets in the company that would be complemented by expansion on wireless. We have national network today. We have national presence. We have customers that are asking for wireless. We have a regional wireless business that's very successful, so there are things to build on," stated Blouin.

MTS Allstream still analyzing auction strategies

News | December 10, 2007

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