SaskTel Publishes Risk Assessment on Impact of Bell MTS Deal

SaskTel has released its risk assessment report detailing the possible impacts of how the recent Bell MTS deal in Manitoba coulda affect the Saskatchewan carrier. The report was commissioned last month following the announcement of Bell’s plan to acquire MTS in a $3.9 billion deal, still set to be approved by regulators.

The 23-page report, conducted in part with independent third party Mark H. Goldberg & Associates Inc., details a variety of scenarios in how SaskTel may be impacted by the merger in Manitoba.

SaskTel says the “most fundamental risk” is the possibility of lower numbers of facilities-based carriers in Manitoba, which could result in the Federal government introducing new incentives or policies to spur additional competition, “through lower costs for new entrant spectrum or other measures,” which could increase costs or restrict the Saskatchewan carrier’s expansion.

One of the first risks that could play out in the next 12 months is the establishment of rules for the upcoming 600Mhz band auction.

Also, the report notes if Shaw sells WIND Mobile or partners with another network in Manitoba, SaskTel could “face significant pressure from a second bundled service package in Saskatchewan,” especially if the Manitoba market sees further concentration and the Federal government abandons its four carriers objective.

If Winnipeg is deemed the western headquarters for Bell, it could also erode SaskTel’s share of the Saskatchewan business market, in which it currently holds a marketshare of over 90 percent.

Also, if Rogers attempts to replace its lost partnership with MTS by seeking out new retail partnerships with cable companies in the prairie provinces, it would result in the former increasing its “competitive positions”, putting pressure on SaskTel.

The report concludes SaskTel’s net income would be “unable to support the level of dividends that have been returned to the province in recent years,” if the risks identified play out.

Ron Styles, SaskTel President and CEO, said in a statement to iPhone in Canada “The report provides an excellent high level assessment of the potential impacts this transaction may have on SaskTel,” adding “It is also worth noting that some of the risks in the report are not new to the corporation; however, those risks may increase due to this acquisition.”

SaskTel currently has 614,000 wireless customers, to go with 404,000 wireline, 266,000 Internet and 107,000 maxTV subscribers.