Wednesday, September 13, 2006

 

Valley vision

I know we are talking about some really small towns (3700 TV subscribers, 150 internet subscribers in 13 communities), but something seems a little off when the phone company buys the cable company. That is what MTS Allstream announced yesterday in purchasing Valley Cable Vision.

Kelvin Shepherd is quoted:
This transaction advances our strategy of being Manitoba's leading full service provider of wireline, wireless, broadband internet, and television services. We look forward to building on Valley Vision's strong tradition of serving cable television customers in the Pembina Valley, and being able to offer an expanded suite of communications and entertainment service options that meet their needs.
In the Pembina Valley, MTS Allstream won't just be the leading full service provider; they'll be the only service provider in town.

It begs a couple questions. How does creation of a single monopoly provider help customers? How does operating a small cable company benefit shareholders of a national telco? I would like to hear the story behind acquisition.

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Comments:
Mark: The answer to your question "How does operating a small cable company benefit shareholders of a national telco?" may be that it doesn't have to go through the expense and effort to offer video services over its copper pair network. At the same time, the cableco doesn't ever have to go through the expense and effort of offering Internet and telephone services. It could be argued, therefore, that this transaction works against the government's and Commission's efforts to create a competitive environment.
 
it keeps it from being purchased by Shaw in what is one of the fastest growing areas of Manitoba, that is largely the reason the purchase took place. Valley wanted to be sold, and MTS scooped Shaw.
 
it was a closed sale shaw nor anyone else was ever in the running or even allowed to be in the running
 
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