SaskTel Addresses Risks Posed by Bell-MTS Deal

The Bell-MTS deal represents regulatory, competitive, and financial risks to SaskTel, the regional carrier said in a document released on Monday and obtained by CBC News. Fortunately, most of the risks existed before Bell proposed to acquire MTS, so there is not much news here, as those risks were already assessed.

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An earlier assessment found that if the deal goes through, Bell could erode SaskTel’s market share of the Saskatchewan business market, as it would be the only major regional player in Western Canada.

“SaskTel is a competitive regional carrier and it will need to remain competitive going forward in the face of a rapidly changing industry. The BCE/MTS deal does not change this fundamental situation, although it heightens the risks,” SaskTel said in a document released Monday.

While SaskTel did say it has been fighting competitors for nearly 30 years now, the provincially-owned telco also said that it needs an annual capital investment of close to $300 million, which is a concern for the government because provincial debt is growing.

“It is important to note that none of the competitive factors that differentiate SaskTel are directly impacted by Bell’s acquisition of MTS. All of these factors are areas that SaskTel would be focusing on regardless of who is the dominant communications service provider in Manitoba,” the report said.

According to New Democrat Warren McCall, SaskTel’s response to the earlier assessment, which painted a dark future of the regional carrier in the light of the Bell-MTS deal, proved that the telco has been providing good service in a highly competitive industry.

But he seems to be concerned with the fact that SaskTel didn’t address a proposed law that would allow the Saskatchewan government to sell up to 49% of a Crown without it being considered privatization.

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  • SV650

    “…the provincially-owned telco also said that it needs an annual capital investment of close to $300 million, which is a concern for the government because provincial debt is growing.”

    Looks as if you can only be the discount carrier for so long.