Acquisition supports Bell's strategic imperative to Accelerate Wireless
MONTREAL, May 7 /CNW Telbec/ - Bell today announced the $142-million
acquisition by Bell Mobility of the 50% stake in Virgin Mobile Canada not
already owned by Bell, along with an exclusive, long-term licensing agreement
with the Virgin Group for continued use of the Virgin Mobile brand in Canada.
"Bell Mobility's acquisition of Virgin Mobile Canada supports our
strategic imperative to Accelerate Wireless, a core component in Bell's
overall strategy to achieve our goal: To be recognized by customers as
Canada's leading communications company," said George Cope, President and CEO
of Bell and BCE. "This initiative will allow Bell Mobility to be uniquely
flexible in the competitive wireless marketplace, maximizing network, handset,
distribution and global roaming efficiencies, and enhancing the growth of the
No. 1 youth brand in Canadian wireless."
Sir Richard Branson, Chairman of The Virgin Group, said: "Bell has been
an ideal partner for Virgin since 2004. I believe the acquisition of Virgin
Mobile Canada and continuing licence of the Virgin Mobile brand to Bell will
help to expand the Mobile business more quickly and allow even more Canadians
to enjoy the unique wireless service and product experience Virgin created. We
look forward to supporting Bell's expansion through our ongoing efforts to
build the Virgin brand in Canada with entertainment businesses such as Virgin
Festival and Virgin Radio."
While Virgin Mobile Canada will continue to operate independently with
distinct branding and its own distribution channels, both Virgin Mobile Canada
and Bell Mobility will realize enhanced operational efficiencies from shared
network infrastructure, handset acquisition and common distribution in
high-traffic retail locations such as The Source.
"Today's announcement is an excellent complement to Bell's pending
acquisition of national consumer electronics retailer The Source and the
rollout of our new third-generation (3G) HSPA wireless network, which will be
completed by early 2010 and offer new handset options and extensive global
roaming for Bell Mobility clients and Virgin Mobile customers here and around
the world," said Wade Oosterman, President of Bell Mobility and Chief Brand
Officer for Bell.
On a per subscriber basis, the all-cash $142 million purchase price
represents a lower cost of acquisition (COA) per subscriber than Bell
Mobility's current COA average. The acquisition will have limited impact on
Bell Wireless financials in 2009.
Under the terms of the licensing agreement, Bell Mobility retains
long-term rights to the Virgin Mobile brand and the benefits associated with
such a relationship with the Virgin Group. Virgin Mobile Canada was formed in
2004 as a Mobile Virtual Network Operator (MVNO) jointly owned by Bell
Mobility and the Virgin Group. As the No. 1 mobile youth network, Virgin
Mobile Canada offers both prepaid and postpaid wireless service options and
has been awarded the highest customer satisfaction ratings by J.D. Power and
Associates for four years in a row. For more information on Virgin Mobile
Canada, please visit virginmobile.ca
Bell is Canada's largest communications company, providing consumers with
solutions to all their communications needs including Bell Mobility and Solo
Mobile wireless, high-speed Bell Internet, Bell TV direct-to-home satellite
and VDSL television, Home Phone local and long distance, and IP-broadband and
information and communications technology (ICT) services. Bell is proud to be
a Premier National Partner and the exclusive Telecommunications Partner to the
Vancouver 2010 Olympic and Paralympic Winter Games. Bell is wholly owned by
BCE Inc. For information on Bell's products and services, please visit
www.bell.ca. For corporate information on BCE, please visit www.bce.ca.
Caution Concerning Forward-Looking Statements
This news release contains forward-looking statements relating to the
proposed acquisition by a subsidiary of Bell Canada of the 50 per cent stake
in Virgin Mobile Canada not already owned, strategic benefits, operational and
competitive and cost efficiencies expected to result from the transaction and
other statements that are not historical facts. Such forward-looking
statements are subject to important risks, uncertainties and assumptions and
the results or events predicted in these forward-looking statements may differ
materially from actual results or events. As a result, we cannot guarantee
that any forward-looking statement will materialize and you are cautioned not
to place undue reliance on these forward-looking statements.
The timing and completion of this proposed acquisition is subject to
customary closing conditions and other risks and uncertainties including,
without limitation, any required regulatory approvals or expiry of any
required regulatory waiting periods. Accordingly, there can be no assurance
that any transaction between a subsidiary of Bell Canada and Virgin Mobile
Canada will occur, or that it will occur on the timetable contemplated in this
news release. There can also be no assurance that the strategic benefits and
competitive, operational and cost efficiencies expected to result from the
transaction will be fully realized.
The forward-looking statements contained in this news release are made as
of the date of this release and, accordingly, are subject to change after such
date. Except as may be required by Canadian securities laws, we do not
undertake any obligation to update or revise any forward-looking statements
contained in this news release, whether as a result of new information, future
events or otherwise.
For further information:
For further information: Julie Smithers, Bell Media Relations, (416)