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Lee Bragg, left, with his father John at the EastLink head office in Halifax (PAUL DARROW/GLOBE AND MAIL)
Lee Bragg, left, with his father John at the EastLink head office in Halifax (PAUL DARROW/GLOBE AND MAIL)

Cover Story

EastLink: The biggest cable company you've probably never heard of Add to ...

As he expanded his cable holdings, John made sure his eldest son learned the business from the ground up. Lee donned spurs and a belt and climbed poles to repair cable problems. Then he moved on to managing a small cable system in Truro, N.S.

Lee was promoted to co-CEO of EastLink in 1999, the year it became the first cable company in Canada to launch home phone service. "All the bankers thought we were crazy," Lee says.

The Braggs turned out to be spectacularly right. EastLink's service won a big share of the lucrative Halifax phone market. Other cable companies, like Rogers Communications Inc. and Shaw Communications Inc., soon copied EastLink's move in their own territories.

Now it's time for EastLink to launch a wireless network. And this time, nobody thinks they're crazy.

Lee Bragg, left, with his father John at the EastLink head office in Halifax. In 1969, John Bragg decided to diversify away from food and gambled on acquiring a cable licence for the town of Amherst, N.S. The company is now one of Canada's top regional telecom players.

Winning roles

A couple of months before the federal government auctioned off wireless spectrum licences in 2008, executives at EastLink began to play a complicated game. They formed themselves into teams, each team representing one of the rival bidders in the upcoming auction.

Under Lee Bragg's direction, the rival teams began to play out a mock auction for the airwaves above EastLink's cable networks. The first time through, things seemed to go smoothly - until another team pounced, tossing in bids for some of the licences that EastLink coveted, forcing the firm to retaliate and drive up the price.

When the mock bids were counted, Lee realized EastLink had drastically overpaid. He and his team repeated the mock auction over and over until they figured out a winning strategy: Don't bid on key targets right out of the gate; throw out false bids to raise what competitors pay; don't get caught paying for a huge chunk of useless spectrum.

When the auction rolled around, "it happened exactly that way," Lee says.

EastLink got a great deal: For only $25-million, the company won licences that cover 85 per cent of the company's cable footprint, which means the company can profit from bundling cellphones on top of its existing cable, Internet and home phone services.

The victory exemplified the savvy of the Bragg family, according to Dean MacDonald, a cable executive who has known the Braggs since the early 1980s. "It came down to their style again, playing it to a plan and making it work," he says.

With its new wireless licences, EastLink is poised to become even more of a threat in Atlantic Canada, where industry insiders say it has already taken huge market share from Bell Aliant Regional Communications Income Fund, which is 45-per-cent-owned by BCE Inc., the industry giant.

Dan McKeen, vice-president of customer solutions at Bell Aliant, knows all about EastLink. He spent 24 years at the Braggs' company, rising to become co-CEO with Lee Bragg in 1999. He moved to Bell Aliant in early 2010. "We understand that it's a very competitive marketplace," Mr. McKeen says in his Halifax office, after declining to discuss his time at EastLink. He insists, though: "It's a marathon, not a sprint."

To win that marathon, Bell Aliant is expanding its fibre-optic network in New Brunswick to roll out its Internet TV product. "It's a threat," one industry veteran said. "They're taking their piece out of EastLink's cable business."

Going West

But EastLink shows no signs of slowing. After buying up swaths of Shaw's Nova Scotia cable properties in 2001, the company went on to execute two big deals in 2007, gaining more than 40,000 subscribers in southwestern and central Ontario with the acquisition of AmTelecom, and then adding Persona Cable Systems, a rural provider with a dilapidated network sprawling across several provinces.

EastLink now serves half-a-million cable subscribers in nine provinces. It is spending heavily to upgrade some of its recently acquired cable systems, particularly the old Persona network, and equip them to sell products such as Internet and home phone service.

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