Bell Canada Agrees to Buy Astral Media for $3.4 Billion OTTAWA - Bell Canada, Canada's largest telecommunications company, extended its move into the media business on Friday by agreeing to pay 3.38 billion Canadian dollars (about $3.4 billion) for Astral Media, the owner of several prominent cable television channels including HBO Canada. The move follows Bell's acquisition of CTV, Canada's largest private-sector broadcaster, about a year and a half ago, as well as its participation last year in a joint venture that will own all of Toronto's professional sports teams, including hockey's Toronto Maple Leafs. The acquisition may encounter some regulatory challenges. Both competition and broadcast regulators may be troubled by the number of radio stations that will be owned by Bell in some communities after the Astral takeover is completed. "This fits perfectly with what we are trying to do," George Cope, the president and chief executive of Bell, told a news conference in Montreal. We believe TV everywhere is absolutely where the market is going, and so the consumer ends up with more choice. About 75 percent of the purchase will be made in cash with the remainder being covered with Bell common shares. The purchase price includes Bell's assumption of 380 million Canadian dollars in debt. Mr. Cope said that the purchase would immediately generate revenue and cash for Bell once it is completed but he declined to give specifics. Astral operates nationally, but Mr. Cope emphasized the advantages the transaction would bring the company in Quebec, where Astral controls 13 French-language television channels. Mr. Cope suggested that Astral's Quebec holdings would enable Bell to better compete against a rival, without naming the company. One of Bell's competitors, Quebecor, which was originally a newspaper publisher, has expanded into a variety of media businesses. Through its Vidéotron cable television subsidiary, Quebecor competes directly with Bell's cellphone and conventional telephone operations. Bell, which like Astral and Quebecor has its headquarters in Montreal, has been investing in fiber optic technologies to compete against cable television companies, particularly in Quebec. Mr. Cope said that payments to Astral were the largest content cost for Bell's television business. Mr. Cope's plans are Bell's second foray into the media business. In 2000, it acquired CTV for the first time. Following disappointing results, Bell sold control and became a minority partner in the operation for several years. This time around, Mr. Cope has said that the rise of the Internet as well as wireless data will make media content ownership profitable and critical for Bell. Not all analysts are convinced, however. In a note to investors, Dvai Ghose of Canaccord Genuity, suggested Astral's properties were in decline. He said that the Movie Network , one of Astral's most popular English-language channels, would come under increasing competitive pressure from Netflix and that its other specialty channels were threatened by Internet-based content. Mr. Ghose said he was also concerned that taking on more media properties would divert Bell's attention away from upgrading its network to provide television services and higher-speed Internet connections. "While Bell may believe that beefing up Quebec content will help against Vidéotron, in our view, spending $3.4 billion on broadband instead may have been more effective," Mr. Ghose wrote, noting that many Quebeckers have said that they choose Vidéotron because its network offers superior service compared with Bell while almost no one mentions content. At the news conference, however, Mr. Cope said that the Astral acquisition would provide cash necessary to carry out those upgrades.