Aug. 3 (Bloomberg) -- BCE Inc., Canada's largest telephone company, acquired full ownership of Bell West Inc., a provider of Internet services in western Canada, after buying out former partner Manitoba Telecom Services Inc.

BCE purchased Manitoba Telecom's 40 percent stake in Bell West for C$645 million ($490 million), Montreal-based BCE said in a statement. Manitoba Telecom on Feb. 2 exercised an option to sell the stake, and BCE had 180 days to make the payment.

BCE's Bell Canada phone unit and Manitoba Telecom are preparing to compete head-to-head in local, long-distance and Internet services as they end a partnership that began in 1999. The last tie is BCE's 16 percent stake in Manitoba Telecom, which BCE said last month it plans to sell after completing the Bell West purchase.

The Bell West stake and the acquisition of some 360networks Corp. assets in May boost BCE's presence in western Canada, where it aims to win clients from rivals including Manitoba Telecom and Telus Corp.

Manitoba Telecom has expanded outside its borders with the purchase of Allstream Inc., which made it Canada's third-biggest phone company behind BCE and Telus. BCE in May sued Manitoba Telecom over the purchase, which it said violated network and other agreements. The companies settled the lawsuit last month when Manitoba Telecom agreed to pay BCE C$75 million to sever commercial ties early.

BCE said last month it would waive its special shareholder rights after receiving the settlement, including representation on Manitoba Telecom's board. Stephen Wetmore, group president of national markets at Bell Canada; Patrick Pichette, a Bell Canada executive vice president; and Michael Boychuk, BCE's treasurer, have resigned from Manitoba Telecom's board, Manitoba Telecom spokeswoman Melanie Lee Lockhart, wrote in an e-mail.

Shares of BCE fell 4 cents to C$27.94 at 4:17 p.m. on the Toronto Stock Exchange. The stock has declined 3.3 percent this year. Manitoba Telecom shares declined 45 cents to C$44.50.

To contact the reporter on this story: Catherine McLean in Toronto at mclean@bloomberg.net.

Last Updated: August 3, 2004 16:33 EDT