Playing catch-up with rival carriers Shaw, Quebecor and Telus, BCE on Friday proposed paying $1.296 billion to acquire CTV as part of a friendly $3.2 billion takeover deal.

Bell, which already has a 15% stake in CTV, and up until 2005 had a majority stake in the broadcaster, will acquire the remaining 85% stake from The Woodbridge Company Ltd, the Ontario Teachers Pension Plan and newspaper publisher Torstar Corp.

Pending regulatory approval, BCE is looking to get back into CTV as the Canadian wireless, TV and Internet market undergoes revolutionary change.

BCE CEO George Cope said the Canadian phone industry, which his company leads, is changing rapidly, with increased vertical integration, technological change, and regulatory developments forcing the phone giant to get its own slice of high-demand video content to remain competitiveness.

“It will accelerate our wireless business, it’s a hedge against increasing TV programming costs and advertising expense. And it balances the playing field,” BCE CEO George Cope told analysts during a morning call as he defended his defensive play for CTV.

Elsewhere in the industry, Shaw Communications is getting into the wireless business, as is Quebecor Inc., and Shaw is also waiting for regulatory approval to acquire Canwest Global Communications Corp. for $2 billion as part of its own bid for video content to drive its customer offerings.

In addition, Telus Corp. in western Canada is ramping up its own TV offering, and all the Canadian players are gearing up for emerging competition from Hulu, Apple TV and Google TV coming down the pipeline.

Besides a stable of conventional and cable channels, BCE will also assume around $1.7 billion in debt and, given an equity value of $1.525 billion, brings the total transaction for CTV, to $3.2-billion in book value.

That excludes the value of the Globe and Mail newspaper, which will be acquired by Woodbridge, with BCE retaining a 15% stake.

CTV CEO Ivan Fecan also trumpeted the importance of vertical integration across conventional, specialty and digital TV and radio assets.

“In today’s digital age, it is extremely important to be part of a vertically integrated company that can take advantage of video delivered on multiple screens,” he said in the release. “CTV has emerged stronger than ever from the recession … This is the right deal at the right time.”

Fecan also told analysts wary of BCE purchasing 100% of CTV, rather than choice assets, that it was important to cover the waterfront in TV content to catch all online consumption.

“While sports, news and music are important, if you look at the track record of what most people are downloading, it’s the Gossip Girls, it’s the Jersey Shores. The actual consumer behavior is a little bit what you think, but it’s also what you don’t think,” Fecan told analysts.

Fecan added CTV was on the mend after a deep ad industry downturn in 2009, and poised for growth as the Canadian economy improved.

CTV operates 27 over the air stations countrywide, and another 30 specialty channels, and web properties like CTV.ca and MuchMusic.com.

CTV also owns CHUM Radio, which operates 34 radio stations across Canada.

BCE will finance the CTV deal with a new $2 billion bank facility, another $750 million in new BCE common shares and surplus cash.