Satellite TV vindication -- Andrew Willis
Monday, September 28, 2009 02:26 PM
Andrew Willis
BCE’s decision to keep bundlingsatellite TV with telephone services got an indirect boost recently, asthe Wall Street Journal weighed in with a view than U.S. wirelessleader Verizon Communications should buy DirecTV.
The WSJ article- it's behind the subscriber firewall - took recent comments by VerizonCEO Ivan Seidenberg to their logical conclusion. Mr. Seidenberg hasbeen talking up a strategy of making video a “core product” in thephone company’s fixed line business. Verizon has enjoyed some successin winning clients for its video and Internet services, but sill ranksa distant eighth to rivals in this space. While there’s nothing tosupport the idea that a deal is in the works, the WSJ pointed out thatbuying DirectTV would instantly make Verizon the No. 2 player, behindComcast.
Moving to BCE,the incumbent Canadian phone company went through a well-documentedslimming plan under its last two CEOs, George Cope and Michael Sabia.That strategic review saw a number of holdings sold - divisions such asTelesat fetched eye-popping prices.
Through it all, Montreal-based BCE kept a satellite television systemthat’s now branded as Bell TV, and was known as Bell ExpressVu. It has1.8-million subscribers. There was talk of monetizing this stake -selling it, by any other description - early in Mr. Sabia’s tenure,when the conglomerate needed cash quickly, and the conglomerateapproach was found wanting.
BCE’s strategy of bundling phone and TV services would get a new shot of support if Verizon were to move on DirectTV.
The same sort of validation would play out at Shaw Communication, the No. 2 player in the domestic satellite TV market. Calgary-basedShaw runs an 840,000 subscriber division called Shaw Direct, which wasformerly known as Star Choice Communications. Shaw’s roots are incable, and it is building a telecom network that includes land linesand wireless.
https://www.theglobeandmail.com/blogs/streetwise/satellite-tv-vindication/article1304330/