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Feb 15 (Reuters) - Canada's business competition watchdog asked BCE Inc to sell six retail stores, some subscribers and telecom spectrum to gain approval of its deal to buy Manitoba Telecom Services.
BCE, Canada's largest telecom and media company, said last May it would buy Manitoba Telecom for about C$3.1 billion ($2.5 billion) to expand its services in the western Canadian province.
Under the terms of the deal, BCE which operates as Bell Canada, must sell 24,700 subscribers and 40 megahertz of spectrum to privately held Xplornet Communications Inc.
BCE said in May it would divest one-third of MTS's postpaid wireless subscribers to Telus Corp after the close of the deal to allay regulatory concerns and reduce acquisition costs.
The investigation found that the deal would remove "a strong regional competitor" that was effective in controlling the pricing of Bell, Rogers Communications Inc and TELUS products.
Lesser competition in wireless services providers would likely lead to higher prices and fewer options for Manitobans.
"Any future potential mergers by Canada's three largest mobile wireless providers, Bell, Rogers and TELUS, can expect to receive a close examination by the Bureau," the regulator said.
The Competition Bureau said the divestiture to Xplornet would set up a new entrant in the Manitoba mobile wireless services market.
Xplornet provides broadband internet through fixed wireless and satellite networks throughout Canada, including rural Manitoba. (Reporting by Vishaka George in Bengaluru; Editing by Martina D'Couto)