Duopoly ahead: Telus and Bell considering a merger?!

Wow. Looks like we’ll have a duopoly on cellular networks if this merger goes through, but hey, it’s all Canadian! All hail our CDMA overlord Belus!

The Star has the story. Telus is wary of the merger not being allowed.

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Vancouver-based Telus, the country’s second-biggest phone company, confirmed Thursday it has entered into a mutual non-disclosure and standstill agreement and is pursuing non-exclusive discussions with BCE about a possible merger. “Telus believes the combination of the two businesses would represent a compelling strategic and financial opportunity for all BCE and Telus stakeholders,” [Telus] CEO Darren Entwistle said in a release.

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Federal Industry Minister Maxime Bernier acknowledged last week the government is aware of the fierce debate around whether Canada’s mobile market lacks competition as industry players exchanged barbs over whether the country’s main mobile companies – BCE, Telus and Rogers Communications Inc. (TSX: RCI.B) – have already become too dominant.

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Recent media reports, quoting sources close to the company, said Telus was unlikely to join the bidding unless there has a clear signal from Ottawa that it would not block a marriage of the country’s two largest telecommunications companies.

This news comes just as the set-aside for the spectrum auction is being discussed. I think that this will generate some more comments angled towards helping new entrants. I’m reminded of the Rogers buyout of Fido, which I couldn’t believe was allowed, and also the mergers in the US.

And now for a word from Stephen Colbert on the mergers.. [Here's an alternate link if the embedded video goes down.]

Update June 27th 2007: All that hype for nothing. Telus did not bid on BCE after all. “The inadequacies of BCE’s bid process did not make it possible for Telus to submit an offer,” said the Vancouver-based firm in a terse, two-line statement.