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To: pat mudge who wrote (10343)	3/16/1999 8:34:00 PM
From: zbyslaw owczarczyk	Read Replies (1) \| Respond to of 18016

Canada's Atlantic telephone firms in merger talks By Robert Melnbardis MONTREAL, March 16 (Reuters) - Canada's four Atlantic telephone companies said on Tuesday they were in talks to merge into a single entity that would bring the region's telecommunications services under partial control of Canada's largest telco, BCE Inc. (Toronto:BCE.TO - news). Bruncor Inc. (Toronto:BRR.TO - news), NewTel Enterprises Ltd. (Toronto:NEL.TO - news), Maritime Telegraph and Telephone Co. (Toronto:MTT.TO - news) and Island Telephone Co. (Toronto:IT.TO - news) said in a joint statement they were in discussions which might lead to a merger, but had made no final decisions. ''Our discussions indicate that by combining our resources we can create a much stronger company,'' the companies said. ''We believe that a merger would provide increased opportunities for new investment and enhanced growth for a new company and the Atlantic Provinces.'' Montreal-based BCE, Canada's most widely held public company and sole owner of Bell Canada, the country's largest telephone concern, holds significant equity stakes in the four Atlantic telcos. BCE is backing the merger plan, but said it was not its idea. ''If the four companies come to the agreement that this makes sense and proceed with it, then we will certainly support it. It is their decision, however,'' BCE spokesman Don Doucette told Reuters. BCE has a 54.9 percent control position in Newfoundland's NewTel, a 44.8 percent stake in New Brunswick's Bruncor, and a 34.4 percent holding in Nova Scotia's Maritime Telegraph and Telephone. The latter holds 52 percent of Island Telephone, which serves the tiny province of Prince Edward Island. Analysts said the merger would make sense because of the high degree of cooperation between the four companies and BCE. Canada's deregulating telecommunications industry has seen a spate of mergers and alliances in recent months as domestic and international competitors jockey for position in the emerging market for long-distance voice and data communications. New competition for local telephone services is also sparking mergers. In early March, AT&T Canada Corp., 33 percent owned by AT&T Corp. (NYSE:T - news) and Calgary-based MetroNet Communications Corp. (Nasdaq:METNF - news) unveiled a C$7 billion merger plan. In late January, shareholders approved the union of BC TELECOM Inc. (Toronto:BCT.TO - news) and Alberta's TELUS Corp., creating a powerful C$10 billion Western Canada rival to Bell Canada. There has been growing speculation in the financial markets that BCE itself will soon link up with a major international telecommunications concern. ''There will be other things happening over the next few months, big stuff,'' said John Drolet, analyst at Yorkton Securities. Canada's four Atlantic provinces account for a population of about 2.3 million, just under eight percent of the national total of 29 million. By contrast, Bell Canada has seven million residential and business customers among the 18 million people living in Canada's two most populated provinces, Ontario and Quebec. ($1=$1.53 Canadian)