President and CEO of Bell Canada Enterprises (BCE) George Cope at the annual general meeting in Toronto in 2009. With the bid for Astral Media, Mr. Cope has made another move in his quest for convergence of content and the delivery of services like Internet, TV and wireless.Nathan Denette/The Canadian Press
As a young executive launching a new telecom business, George Cope showed his driven side: Over a period of just six weeks, he held a gruelling 160 meetings with investors.
At the time, Mr. Cope was trying to get a new wireless carrier off the ground, one that would challenge the goliaths of the industry, BCE Inc. and Rogers Communications Inc. The skeptics thought it was a losing idea, but Mr. Cope figured in the early 1990s that the industry would evolve to have numerous players. He was proved right: the company, Clearnet Communications, was eventually sold to Telus Corp. for $6.6-billion, creating another giant telecom company in the process.
"He's amazing, he is relentless," says John Bitove, the Canadian businessman who is the executive chairman of Mobilicity, a wireless rival.
Today, as president and chief executive officer of BCE, Mr. Cope is making another big gamble on the future of the industry, and he has shifted his single-minded devotion to taking his company in a new direction. When he was tasked with leading Bell in 2008, his job was to whip the lumbering former phone monopoly into fighting form in a wireless world.
But nobody quite expected that he would do this.
With BCE's roughly $3-billion takeover bid for Astral Media Inc. on Friday, Mr. Cope's vision for the new Ma Bell has become as stark as Bell's blue-and-white branding. It's all about media now. Not satisfied with just snapping up Canada's No. 1 broadcaster, CTV Inc., for $1.3-billion in 2010, Mr. Cope and the board teamed up with Rogers Communications for a $1.32-billion takeover of Maple Leaf Sports and Entertainment late last year, and now there's the Astral deal.
The bet Mr. Cope unveiled on Friday is also very much about Quebec. The hope is that Astral's large cache of media assets – including 16 specialty channels and French-language radio stations – will better position BCE against Pierre Karl Péladeau's media and telecom juggernaut, Quebecor Inc., which has launched phone, Internet and wireless products that have eaten away at Bell's businesses there.
There is a risk that Mr. Cope's conversion from telecom network guy to media guy – which took place as he watched the 2010 Winter Olympics female gold-medal hockey game on his cellphone en route from Whistler to Vancouver – comes at the wrong time, or proves to be too costly. BCE has pursued this starry-eyed dream of telecom-media convergence before, when it bought into CTV in 2000, only to find the financial benefits elusive.
But that type of convergence is now de rigeur at Bell under Mr. Cope, who sold the deal on Friday with emphasis on new technologies, the "four screens" – of TVs, smartphones, tablets and computers – and the ability for Astral's television programming to enhance the appeal of Bell's bread-and-butter telecom services like Internet, wireless phones and TV.
"We're not acquiring it as a hedge," Mr. Cope explained on a Friday call with analysts. "It's part of a clear strategy in a market where all of our major competitors in Canada, in the TV business, have content relationships and content businesses."
The deal still requires regulatory approval from the Canadian Radio-television and Telecommunications Commission, as well as the Competition Bureau. But assuming it gets approval, it will continue Mr. Cope's reshaping of the historic company. The proof of Bell's sharp turn is on the financial statements: Since 2010, Bell has pulled in more revenue from TV services than it has from its deteriorating land-line phone business. That's "quite a statement, if you think of the history of Bell Canada," Mr. Cope said when the company bought CTV.
Still, the strategy has its detractors, apart from those who decry the increasing concentration of Canada's media business in a few corporate hands. Since Bell's purchase of CTV, the CRTC released a decision prohibiting telecom companies from withholding media content from rivals – a ruling Canaccord Genuity analyst Dvai Ghose says "makes a mockery of owning content."
Telus Corp., taking a different approach, has seen its stock soar from around $29 in 2009 to $57.20 on Friday, all while avoiding the rush to buy broadcasting assets and instead focusing on wireless and state-of-the-art TV distribution. Bell, whose stock has also risen over the same period, is in a much earlier stage of rolling out a TV system similar to Telus's, but executives have also spent time buying up media properties and integrating them.
"When Cope came to BCE he said (he was) going to focus on the core connectivity assets and not divert from that focus, like his predecessors," Mr. Ghose said. "Since that period of time he's bought CTV, bid for MLSE, and now bid for Astral. It's not clear to me how any of them are core telecom assets."
But Bell Mobility president Wade Oosterman said the telecom industry has evolved to a "pick a screen and fill it with goodness" model that makes owning content a necessity.
"The more [Cope]looked at things, the more obvious it became to him that this integration idea was one that had lots of merit," Mr. Oosterman said. "We could see it in various aspects of our results, that this was really something – whether that's mobile video on our wireless business, where people are signing up in vast numbers, to the results we've enjoyed since we owned CTV."