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    The new face of BCE?  
    Globe and Mail  
   

Catherine McLean and Sinclair Stewart

 
    September 22, 2007  
   

MONTREAL -- The new owners of BCE Inc. are looking for a Canadian with strong operational skills to steer the struggling telephone company, sources say. They may not have to look very far.

That description fits George Cope, the president and chief operating officer of BCE's Bell Canada telephone unit, and sources close to the buyers recently confirmed Mr. Cope is a "strong candidate."

While Mr. Cope hasn't discussed such ambitions publicly, it's obvious that he wants the top job. Nearly two years ago, he left a plum job as head of wireless at rival Telus Corp. to take on the considerable challenge of getting BCE's operations in shape.

"It would appear logical it would be George," said Greg Eckel, senior vice-president at Morgan Meighen & Associates, a BCE shareholder. "It seems like such a natural progression."

His big chance to lead Canada's biggest telephone company emerged yesterday, when Michael Sabia told BCE shareholders that he will step down as chief executive officer after the $34.8-billion takeover by a group led by Ontario Teachers' Pension Plan closes next year.

Mr. Cope did not attend the shareholders meeting in Montreal and he was not available for comment. A BCE spokesman said it is up to the new owners to appoint the successor. Teachers' didn't respond to an e-mail seeking comment.

To be sure, there are other highly respected and driven telecom executives in Canada that could also be candidates. They include Telus Corp. chief executive officer Darren Entwistle, Manitoba Telecom Services Inc. CEO Pierre Blouin, and Nadir Mohamed, chief operating officer of the communications group at Rogers Communications Inc.

It is unlikely, however, that the new owners would want to part ways with Mr. Cope, observers say. After all, it was considered a major coup when Montreal-based BCE recruited him in October, 2005.

Mr. Cope, now 46, had already established a stellar reputation during his 20-year career in the cellphone industry, with strengths in team building and marketing.

He started out running an upstart wireless carrier called Clearnet Communications at the end of the 1980s. That venture proved so successful it was snapped up by Western Canadian telecom giant Telus in 2000 for $6.6-billion. That experience at Clearnet may pay off now in the CEO race. He worked with one of BCE's other acquirers, Madison Dearborn Partners LLC, when it was an investor in Clearnet, and they reportedly think highly of him.

At Telus, he was put in charge of the wireless operations as the Vancouver-based firm tried to expand across Canada. He stopped slashing wireless rates to woo customers, and spearheaded an industry move to focus instead on profitable growth.

While consumers may not have liked it when Telus and other carriers pushed back the time when free evening calls start, shareholders were content with the impact it had on revenue and profit. Yet Mr. Cope remained No. 2 to Mr. Entwistle, who wasn't leaving any time soon.

When Mr. Cope defected to BCE, many investors hoped that the outsider from a young and fast-growing industry would quickly shake up the stale air within Bell's corridors. That turned out to be a tall order, and Mr. Cope clearly still has to prove himself.

Bell's land-line phone business, under attack from the cable industry, continues to lose customers. In the second half of 2007, customers cancelled another 114,000 local phone lines.

Then there are the so-called growth businesses that are running into problems, including Mr. Cope's specialty area. The first quarter of this year was really rough in wireless as Bell added just 13,000 subscribers, held back by higher prices and a change in the way it pays cellphone dealers. In the second quarter, Bell signed up 63,000 wireless customers, an improvement but still below what its rivals reported.

While some observers question his effectiveness, others say these problems shouldn't come as a surprise. After all there is a vast amount of work to be done, along with questions over how much leeway Mr. Cope has had to date in making the needed changes. He is no longer leading a highly successful wireless company, but instead rebuilding a former monopoly that is struggling to find its way in a much more competitive world.

"The expectations the Street had were far greater than any one person could have done," said Iain Grant, managing director of telecom consultancy SeaBoard Group. "Bell is a bigger thing than George had tackled in the past."

Nevertheless, considering Mr. Cope's knowledge of Bell and the greater telecom industry, observers believe he should be given a chance. Mr. Grant, for example, said he was encouraged that Bell reduced its wireless data rates this week in anticipation that competitor Rogers Wireless would do so. "There is some Cope DNA filtering into the troops," Mr. Grant said. "Whether it's enough, we'll have to wait and watch."

 


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