BCE Enters US Fibre Market with Major Partnership
Deal News | May 09, 2025 | fitch media ventures
Bell Canada Enterprises (BCE) is set to enhance its US fibre operations through a strategic partnership with the Public Sector Pension Investment Board (PSP Investments). This new venture, initially called Network FiberCo, involves BCE partnering with PSP Investments, which will potentially invest over USD1.5 billion for a 51% equity stake. The joint venture aims to become one of the largest regional fibre providers in the US. By deconsolidating from BCE's financials, the venture will not burden BCE's cash flow, allowing it to focus on strategic growth without impacting dividends, which have been paused due to competitive pressures in Canada. The partnership is expected to expedite the scaling of fibre networks in the US, adding substantial coverage alongside existing infrastructure, while opening the wholesale market for smaller ISPs. Regulatory approval from US authorities, including the FCC and DoJ, is pending given the geopolitical context between US and Canada, however improving diplomatic relations provide a positive outlook for the deal.
Sectors
- Telecommunications
- Private Equity
Geography
- United States – The main geographical focus of the fibre network expansion is in the United States.
- Canada – BCE, a Canadian-based telecom company, is leading the expansion effort, with implications on its Canadian operations.
Industry
- Telecommunications – The article primarily discusses BCE's involvement in expanding fibre network infrastructure in the US.
- Private Equity – The participation of PSP Investments, a Canadian pension fund, emphasizes the role of private equity in this investment strategy.
Financials
- USD 1.5 billion – The potential investment by PSP Investments for a 51% equity stake in the joint venture.
- USD 3 billion – Combined value of the joint venture if BCE matches PSP Investments' involvement.
- Approx. CAD 1 billion – Expected improvement in BCE's free cash flow over the period 2026-2028 as a result of the joint venture.
Participants
| Name | Role | Type | Description |
|---|---|---|---|
| Bell Canada Enterprises (BCE) | Target Company | Company | A major telecommunications company in Canada looking to expand its fibre operations in the US. |
| Public Sector Pension Investment Board (PSP Investments) | Bidding Company | Company | A large Canadian pension investment fund investing in the fibre network venture with BCE. |
| Ziply Fiber | Other Company | Company | The US-based last-mile fibre business involved in the joint venture with BCE. |
| Verizon Communications | Other Company | Company | A US telecom company referenced for its acquisition plans related to fibre assets, providing market context. |
| Fitch Media Ventures | Private Equity | Company | The PE firm providing analysis on the funding and strategic move by BCE in the fibre market. |