Public Interest Advocacy Center (PIAC), a non-profit organization that advocates for Canadian consumers in regulated industries, is calling on Bell Media (NYSE: BCE) to release financial information regarding its intent to sell telecommunications provider NorthwesTel to Sixty North Unity (SNU), a consortium of Indigenous businesses, APTN News reported. PIAC submitted a request in July to the Canadian Radio-television and Telecommunications Commission (CRTC).
NorthwesTel, a Bell subsidiary headquartered in Whitehorse, Yukon, operates over an area spanning roughly 1.4 million square miles in some of the most remote and sparsely populated northern areas of Canada. This region encompasses the Northwest Territories (N.W.T.), Nunavut, and parts of Yukon, northern British Columbia, and northern Alberta and holds a population of less than 200,000 people, according to Inside Towers Intelligence. Population density is extremely low due to the vast, remote, and rugged terrain.
NorthwesTel provides essential communication services helping to bridge the digital divide across the region. According to Inside Towers Intelligence, the company serves around 40,000 residential and business subscribers with wireline telephone, cellular and mobile data services in many communities, internet access, cable and satellite TV and enterprise-level data services, along with 911 service for emergencies and satellite communications for isolated and remote areas. Because of the remoteness, NorthwesTel customers pay a higher cost for phone and internet service compared to customers in more populated southern Canada.
SNU announced in June its plans to purchase NorthwesTel for up to C$1 billion (US$730 million) cash, APTN News reported. SNU is owned by Yukon First Nations Telco in Yukon, Denendeh Investments Incorporated in N.W.T. and Kitikmeot Corporation in Nunavut, APTN News reported. Yukon First Nations Telco is a newly developed consortium of 13 Yukon First Nations development corporations.
According to the release, once the deal is completed, NorthwesTel will become the largest fully Indigenous-owned telecommunications company in the world.
“There’s very little information,” said John Lawford, PIAC’s executive director and general counsel. “I think that people who are reliant on NorthwesTel as their only provider or their main provider of telecommunication services deserve to know the full deal so they can decide whether it’s a good thing.”
After the announcement, the CRTC sent a letter to Bell and NorthwesTel requesting a written copy detailing information of the sale. However, Bell responded saying that disclosing “highly sensitive” information related to the sale “could provide existing or potential competitors with information not otherwise available to them.” The section of the document relating to the transfer of ownership to SNU is redacted.
“We just want to know the way the deal is structured,” PIAC’s Lawford said. “It’s a big deal. It’s essential infrastructure for everybody.” He said Northerners should be concerned about the sale’s billion dollar price tag, noting it’s unclear where SNU will get the money to pay for the transaction, APTN News reported.
Smaller telecommunications providers that operate in the region such as KatloTech Communications and SSi Canada also have questions about the proposed sale price and whether opportunities for competitors will be limited.
SNU, for its part, in a letter to PIAC said that the commercial relationship with Bell will create a stable revenue stream for NorthwesTel and help close the digital divide, and that it doesn’t have a “special relationship” with Bell.
The Competition Bureau, a federal agency responsible for ensuring that markets operate in a competitive manner, said it’s aware of the proposed acquisition and confirmed it would be reviewing the transaction.
Bell disputes it is attempting to hide information, arguing in a letter to the CRTC, that it has provided the relevant information to the Commission, and has been fully transparent as to the arrangement between Bell and NorthwesTel.
The CRTC says it is working on PIAC’s request and will make a decision as soon as it can.
By John Celentano, Inside Towers Business Editor
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