Sell SaskTel or Save SaskTel?
By Lynne Bell
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听听听听听听听听听听听 The spectre of the possible sale of SaskTel first emerged back in May, when the Saskatchewan government announced that it would do a risk analysis on the Crown telecommunications company. Since then, Premier Brad Wall has stated that any potential sale would be voted on by the province's citizens and has also appointed Dustin Duncan as the (new) minister responsible for SaskTel.
听听听听听听听听听听听 The premier stated: 鈥淚f we get an offer and we think it generates a significant amount of money for the province, maybe enough to eliminate our operating debt, if it takes care of the jobs question in Regina, if it provides better coverage, we are at least going to take it to the people and we'll need someone (Duncan) to lead that process.鈥�
听听听听听听听听听听听 Saskatchewan's operating debt is currently estimated to be $4.1 billion, so eliminating that sum would be a relief to any government, indeed. However, SaskTel is not only an important part of the province's economy; it also pays a yearly dividend which helps to pay for essential services such as health care and education, to name two. SaskTel also has some of the lowest rates in Canada and does a pretty good job of providing coverage to remote areas of this vast province.
听听听听听听听听听听听 I remember when government-owned utilities were sold to private companies in Alberta. Initially, the monopoly was broken and new providers offered significantly discounted rates for signing up with them. However, soon enough, rates crept up, and aside from whatever taxes these companies paid, residents of the province didn't receive any additional benefits from utilities being privately-owned.
听听听听听听听听听听听 Selling SaskTel-which really is a jewel in one of Saskatchewan's Crowns- is like selling a valuable, cash-generating, irreplaceable asset to cover a short-term cash-flow concern, which is never a good idea if it can be avoided. Getting rid of operating debt by selling an asset like SaskTel is a short-term fix to an ongoing financial problem that almost all governments encounter during their time in office. And selling SaskTel would really only buy more time, not permanent change in the way governments handle finances. Even if the Saskatchewan Party stayed in office and avoided debt completely, I would bet that any successors would not.
听听听听听听听听听听听 Once SaskTel is gone; it's gone. In its 108-year history, it has provided pretty decent service at听 pretty decent rates to citizens from all parts of the province. It's a unique asset that benefits the majority of Saskatchewan's citizens and if there is a referendum called to vote on whether it should be sold, we would be wise to remember that.
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Keeping SaskTel a Crown company
By Kelly Running
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听听听听听听听听听听听听听听听 Well, the other day there was speculation on how a million-dollar bidding war could erupt IF SaskTel is put up on the auction block. According to a CBC article both Bell Canada and Telus would be very interested in obtaining SaskTel.
听听听听听听听听听听听听听听听 To be honest鈥� how could they not? SaskTel currently keeps cell phone bills in Saskatchewan low, while providing service to nearly the entire province, giving importance to rural clients.
听听听听听听听听听听听听听听听 The analysis and of what would happen comes after Bell announced a $3.9 billion deal with Manitoba Telecom Services.
听听听听听听听听听听听听听听听 For Saskatchewan, it could mean money that they currently don鈥檛 have to work with鈥� a considerable sum. But, part of the legacy of Saskatchewan is that we鈥檙e slightly socialists, despite everyone vehemently denying it these days. This area should particularly understand the importance of working together with Tommy Douglas, a politician and forefather of healthcare in Canada.
听听听听听听听听听听听听听听听 So, a crown owned company like SaskTel (SaskPower, SaskEnergy, SGI, Sask Liquor and Gaming, etc鈥�) was created for the people. In general Canada pays one of the highest rates for wireless service in the industrialized world 鈥� CBC reported. Reading through the CBC article, 鈥淧rovinces with the cheapest cellphone plans and why the rest of us don鈥檛 get them,鈥� you discover that Saskatchewan costs approximately half of what any other communication company does.
听听听听听听听听听听听听听听听 Koodoo for example, as reported in the CBC article, has a $48 per month plan with 5GB of data and unlimited Canada-wide calling and texting. In other provinces this amount doubles, while Quebec is the only province to offer a better rate with an extra GB of data for $58 per month.
听听听听听听听听听听听听听听听 Across the board the cheapest deals were in Regina, Winnipeg, and Montreal鈥� And with Manitoba Telecom Services being sold to Bell鈥� will prices jump to come in line with the rest of the country?
听听听听听听听听听听听听听听听 鈥淭ech analyst Daniel Bader says cell customers in Saskatchewan, Manitoba, and Quebec enjoy cheaper rates because those provinces all have a strong regional competitor that can compete with the top three telecom companies: Telus, Rogers, and Bell.鈥� CBC reported in that same article.
听听听听听听听听听听听听听听听 So, without a regional entity like Manitoba Telecom Services, what happens? Whether the Sask Government wants to sell or not they need to wait to see what actually happens with the market. Although the billion dollar deal would aid in a lot of ways, it would mean that Sask citizens would likely be hit by rising prices coming in line with the prices of the three top companies. Right now Sasktel keeps the costs down for us because the other companies have to undercut their prices to meet a competitive price with Sasktel as it was already established when the other companies came into the province.
听听听听听听听听听听听听听听听 Is Sasktel losing its edge? Maybe鈥� but if people knew they were getting a good deal on their plan because their provider is having to stay competitive with Sasktel, would they switch carriers?
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