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BlackBerry 'fires' T-Mobile; U.S. carrier fires back

These are stories Report on Business is following Wednesday, April 2, 2014.

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Chen cuts off T-Mobile
Two spunky CEOs are giving corporate watchers a better view of a bun fight than they normally get.

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In this case, it's the underdog BlackBerry against a major U.S. phone company that calls itself the "Un-carrier."

The spat between BlackBerry chief John Chen and T-Mobile US Inc. CEO John Legere began in February, when the American carrier launched a promotion to entice BlackBerry users to switch to Apple Inc.'s iPhone.

That prompted a furious response from Mr. Chen, who displayed his anger publicly on his company's blog. BlackBerry users also spoke out.

Mr. Chen, in turn, then spent some time on Twitter needling his BlackBerry counterpart, with get-under-your-skin comments such as this: "Was going to engage John Chen on Twitter, but turns out he's not here. I'll check MySpace."

Fights between device manufacturers and wireless carriers are not uncommon, but a public war of words like this one is rare.

The tussle between the two took a somewhat dramatic twist late yesterday, when Mr. Chen announced that BlackBerry won't renew T-Mobile's licence to sell his devices when that deal expires this month.

In a short statement, BlackBerry gave no reason for dumping T-Mobile, which is believed to represent between 10 per cent and 15 per cent of the smartphone maker's U.S. business.

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"BlackBerry has had a positive relationship with T-Mobile for many years," Mr. Chen said.

"Regretfully, at this time, our strategies are not complementary and we must act in the best interest of our BlackBerry customers," added Mr. Chen, who has launched a turnaround at the Waterloo, Ont.-based company.

"We hope to work with T-Mobile again in the future when our business strategies are aligned."

BlackBerry would not comment beyond the statement. But a source close to the company said much of this is about which carriers Mr. Chen is targeting.

Remember, when this fight broke out publicly he said he would put his efforts on strengthening BlackBerry's relationships with its two biggest connections, Verizon Communications and AT&T Inc.

That's no small matter, because money and resources go into those relationships.

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Add to that, the source said, the dissatisfaction at BlackBerry over the resolution of the public tussle, or lack thereof.

And, of course, the fact that "respect matters to John, loyalty matters to John."

And while no one is saying this, it's not necessarily a question of Mr. Chen escalating the battle, but instead may well be a case of the spunky CEO getting out in front of the divorce, with his own message, before any comments from Mr. Legere, who took some time before getting warmed up today.

Hours after the BlackBerry announcement, the T-Mobile chief again fired back via Twitter today, saying that "I can't, for the life of me, understand why @BlackBerry would take choices away from customers."

In one case, responding to one Twitter user who said he'd yet to see an estimate revision from T-Mobile "since BlackBerry fired them as a customer last night," Mr. Legere was dismissive of the smartphone maker's clout:

"Are you serious or joking? We value all customers but this is 1+ per cent of our base total and a small fraction of what we add quarterly."

Osisko finds white knight
In an effort to thwart Goldcorp Inc.'s hostile bid, Osisko Mining Corp. cut a complicated deal with Yamana Gold Inc. and two Canadian pension funds that will allow the miner to operate its large gold mine in Quebec, The Globe and Mail's Rachelle Younglai reports.

Toronto-based Yamana will buy a 50-per-cent interest in Osisko's mining and exploration assets for cash and stock valued at $7.60 for every Osisko share. That is 10 per cent higher than Osisko's closing price Monday, while Goldcorp's cash and stock offer of $6.33 per share.

At the same time, two Canadian pension funds CPP Investment Board and Caisse de dépôt et placement du Québec will provide Osisko with a total of $550-million in funding in return for a stream of future production from Osisko's Canadian Malartic gold mine.

Agrium slips
Shares of Agrium Inc. are slipping this morning after the Canadian agribusiness giant warned investors to expect a first-quarter profit that's "just above breakeven."

"The slow start to the spring season is expected to impact the timing of wholesale, and to a lesser extent retail, earnings," Agrium said in a statement.

"First-quarter wholesale results were also impacted by reduced rail availability and the usual lag in realized wholesale nutrient prices."

Factor in, too, the unplanned shutdown of a boiler that needs to be fixed.

Agrium gave no other estimate for its results, but said it would provide an outlook for the second quarter when it releases its first-quarter report May 6.

"Agricultural fundamentals continue to improve and we anticipate a strong spring season which will benefit both retail and wholesale results in the second quarter," it added.

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About the Author
Report on Business News Editor

Michael Babad is a Report on Business editor and co-author of three business books. He has been with Report on Business for several years, and has also been a reporter and editor at The Toronto Star, The Financial Post and United Press International. His articles have appeared in major newspapers around the world. More


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