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Bell wins bid but Telus isn’t going anywhere

Telus promises continued support for events in Whistler

Telus has a huge presence in Whistler but as much as it might do for this community, it did not do enough to convince the Vancouver Organizing Committee that it deserved to be the official telecommunications sponsor for the 2010 Olympics.

Last Monday (Oct. 18) VANOC and Bell Canada announced they had formalized an eight-year, $200 million deal for the 2010 Games.

The deal is unique mostly because of the size of the purse but also because VANOC had only budgeted for domestic sponsors to contribute $20m to the Olympic bid.

Telus made a $135m bid for the contract but it also has a bigger presence in B.C. and Alberta and they gambled that this fact would give them an edge over Bell.

Telus also put in more than $4m in cash and donations in helping Whistler/Vancouver during the bid process.

But in the end the money talked and Bell’s bigger offer won.

The positive news for people in Whistler and B.C. is that, on top of what Bell is going to invest, Telus now has a wad of money to invest in other areas such as events and sports development.

Director of Marketing Shannon Taylor said Telus’s commitment to winter and amateur sport was "stronger than ever".

"We are as committed, or more committed than ever to advancing our relationships with the Whistler community, with Intrawest, with the events we have sponsored over a number of years including the Telus World Ski and Snowboard Festival," said Taylor. "And as you probably know we’ve just signed a deal to bring the (golf) skins game to Whistler next summer.

"We’re going to be the sponsor of the World Snowboard Championships in January, we are committed to the Telus Whistler Sports Centre and we are committed to the Telus Conference Centre.

"We also put money into the Whistler Foundation through the Telus Winter Classic, I mean the list is exhaustive – and it’s growing.

"Our commitment to amateur sport and to winter sports is stronger than ever."

While Telus might now be preparing to solidify their presence in the west, Taylor expressed some disappointment at VANOC’s decision and for good reason because the Olympics is proven to be one of the world’s most effective marketing tools.

Visa, Samsung, Coke, McDonalds and a raft of other multinational corporations contribute billions to the Olympic movement.

President of Bell Canada Michael Sabia spoke specifically of both Samsung and Visa and the enormous impact the Olympics has had on their brand.

Sabia said he expected this partnership to increase Bell’s mobile phone and satellite TV services by more than one per cent and this increase in market share equates to about $300m of value for shareholders.

Taylor said she was aware of the benefits the Olympics presented. "When you set up a competition you naturally set up a win or a lose strategy and we obviously set out to win, but we weren’t going to set out to win at any cost," she said.

"We’re a fiscally responsible company and we weren’t going to jeopardize the investments we have with other customers.

"When we looked at the big picture, we valued it at what we thought it was worth and what we could afford to pay without jeopardizing other key partnerships."

Taylor said Telus pitched their proposal as the safe option because they have 7200 employees already in the "Olympic footprint" with all the infrastructure, while Bell now has to import and/or hire around 2000 people to stage the games as well as construct the infrastructure.

"We still believe we were the low risk option but money talks," said Taylor.

"The other thing we should probably point out is that with the Games, as much as they are a national and an international sporting event, 80 per cent of the tickets are sold to folks within a 100 kilometre radius of the Games."

Bell’s proposal includes $90m in cash and $60m for communications services while the other $50m will be spent on marketing support, First Nations and local communities.

VANOC CEO John Furlong said both Telus and Bell had "compelling proposals" but asserted that in a contest the winner had to be rewarded.

"We believe that through their resources commitment and vision for what these Games will mean to this country we will be able to reach every home," said Furlong.

"(Bell) They’ve put at our disposal all of their marketing expertise and infrastructure to help us keep a commitment to the country.

"As a result of this there will be jobs in the province, there will be a benefit to the economy and there will be economic activity beyond what we ever would have expected."

Furlong said the money was important but he stressed that VANOC saw Bell as best equipped company to deliver the product to all Canadians.

"It’s the responsibility of VANOC to build support to the tune of $400 to $500m and we will continue to pursue our target there," he said.

"We cannot forget that it’s the obligation of VANOC to deliver Canada’s game’s and you have to have support right across the country in order to do that."

Sabia, Bell’s CEO, did not deny that Bell had a serious task in front of them in B.C., but he said Bell’s presence on the ground is growing.

"I think we’re building a presence everyday, we have 700 employees in B.C. but by the time the Games come around… we expect to have a couple of thousand working in B.C.," said Sabia.

"That number will include four to five hundred more people to establish the Game effort themselves.

"This will also result in a substantial rate of growth in size of our business; we expect that by the time the 2010 Games come that we will be in B.C. at least a billion dollar business.

"And I think it’s fair to say that we are about the fastest growing technology company in B.C. today."

While this announcement presents Bell with the perfect opportunity to market their brand worldwide and to launch their operation into western Canada, Sabia said there were other factors motivating his team to compete for the telecommunications contract.

"The highlight for us is to work with the Olympic rings," said Sabia.

"It’s not about a victory over Telus or entry into B.C., it’s about what these games, flawlessly executed, can represent from one end of the country to the other.

"That’s what we believe is in the interest of our company."