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Gold/Mining/Energy : T.TSE Telus Corp. -- Ignore unavailable to you. Want to Upgrade?

To: Crusader who wrote (44)	5/2/1998 6:10:00 PM
From: Steve P	Read Replies (1) \| Respond to of 107

The article did confirm that Telus is shopping around. Is BC Tel a possibility ? I would think that it may be difficult to acquire the 51% of the shares of BC Tel currently owned by GTE. And if Telus was to make such a move, it would surprise me if BCE didn't make a run also. Fonorola may be a potential target too, if its deal with Sprint unravels. Other Canadian telcos, in my opinion, serve relatively insignificant markets, so they are unlikely takeover candidates for Telus. I wouldn't even hazard a guess as to potential international targets. But from my perspective, I think Telus is a takeover target itself. Look at it this way, the Stentor consortium is a collection of the various Canadian telcos. They effectively have divided up the Canadian market into separate monopolies, each serving a separate region of the country. The most important members of Stentor are BCE (Ontario, Quebec), BC Tel (BC), and Telus (Alberta). Telus' discussions with AT&T certainly brings the future of the Stentor consortium into doubt. BCE, as the senior partner in the consortium, must be concerned about its potential demise. Here you have Telus contemplating a move to a higher level, looking perhaps to supplant BCE as the most important telco in Canada. If the AT&T deal had gone through then the consortium would have been devastated (it may still be dead, despite the deal not going through). It seems to me that BCE has to protect its turf and should take out the problem partner, before Telus does something else to challenge the status quo. Also, I would think that BCE realizes that someday the Canadian market may be open to foreign competition on the local front (probably years away. You would think that BCE would want to solidify its position as the number one player in Canada by adding Alberta (or BC) to the regions it serves, prior to the market being opened up. The US has seen huge consolidations in the telecommunications area, and will someday see competition in the local telephone arena. This to me is a preview of what someday must happen in Canada. Apologies for the rambling. Hope this helps. Keep in mind that this is simply my humble opinion as an observer of the Canadian telco market. And I might add for full disclosure, I am very long Telus. So I hope I'm right about Telus being a potential target. But I've been wrong before (often).

To: Crusader who wrote (44)	5/2/1998 6:18:00 PM
From: Steve P	Respond to of 107

FP Article Saturday, May 2, 1998 Fear of suit sank Telus-AT&T merger By PHILIP DEMONT Telecom Reporter The Financial Post Fear of litigation by the Stentor alliance scuttled a merger deal between Telus Corp. and AT&T Canada Enterprises Inc. last month, according to sources close to the two companies. And the same concern could prevent other Stentor members from breaking up or substantially altering the present organization. "How do you break up this alliance when someone is dissatisfied?" said Eamon Hoey, a Toronto telecommunications consultant. On April 17, Alberta's Telus and AT&T broke off talks about the possible purchase of a stake in AT&T's long-distance subsidiary. AT&T was worried about becoming tangled in a legal battle, because the other Stentor members could sue Telus for violating the covenants of the alliance's agreement, insiders said. But the Stentor deals are secret and Telus couldn't assuage AT&T's concerns about the cost of possible litigation, sources said. As a member of Stentor, Telus has signed a number of agreements concerning cross-country settlement rates, non-competition and areas of co-operation. Pulling out of these arrangements could involve substantial financial penalties, industry watchers said. But because only the settlement rate plan is public, potential partners have no idea of the possible cost and pitfalls of breaking up the alliance. Telus would not discuss the specific reasons for ending its talks with AT&T. "There were several key issues that couldn't be resolved," said spokesman Jeff Welke. "Everybody is going to speculate. But we're taking the high road on this." Telus president and chief executive George Petty has publicly called for changes to the current Stentor setup. Privately, BC Telecom Inc. and Bell Canada are equally frustrated with how the alliance works. "Stentor will be dead within one year," said one industry official. Interestingly, the alliance could be wound up within a year if either Telus or BC Tel initiates its dissolution. But Stentor's demise will take three years if Bell takes the first step. Stentor was formed in 1993 as the offspring of Telecom Canada, another telecom alliance. Stentor consists of the major provincial telephone carriers plus a couple of other smaller exchanges. Stentor's mandate is to lobby governments, co-ordinate various marketing programs, conduct research and development and ensure that a phone call initiated in Halifax can reach Vancouver over members' phone networks easily. The organization worked fine when telecommunications was controlled by a handful of carriers. Once segments of the sector were opened to competition, however, the provincial companies developed separate agendas and programs and Stentor began to have trouble maintaining a united position on telecommunications issues. As well, the more advanced carriers could not introduce new programs as quickly as they might want because of alliance obligations. Still, Stentor could be useful to ensure the phone networks of all members can talk to each other, Hoey said.