SaskTel’s Bottom Line Potentially at Risk in New Assessment

Earlier this week, SaskTel released its high-level risk assessment report regarding the potential impacts that BCE acquiring Manitoba Telecom Services may have on SaskTel.

The review, which was completed by Mark H. Goldberg & Associates Inc., provided an analysis of risks which will become part of an annual strategic planning process for SaskTel.

“The report provides an excellent high level assessment of the potential impacts this transaction may have on SaskTel,” said Ron Styles, SaskTel President and CEO.  “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.”

6791369919_590758e95b_bPotential challenges cited that SaskTel may face in light of the BCE/MTS transaction include the possibility that reduced numbers of facilities-based carriers in Manitoba could lead Federal government policy makers to create incentives for additional wireless carriers, such as introducing lower costs for new competitors, restricting capacity expansion for SaskTel.

The report predicted that the establishment of Winnipeg as a western headquarters for Bell could also lead to an erosion of SaskTel’s share of the Saskatchewan business market.

There is also a risk that Rogers will look to replace its lost partnership with MTS by developing retail partnerships with cable companies in Manitoba and Saskatchewan.

In light of these factors, SaskTel’s net income could be unable to support the level of dividends that have been returned to the province in recent years.

Nonetheless, in the face of such projected difficulties SaskTel remains confident.

“SaskTel has been extremely successful in the highly competitive communications industry for decades and we will continue to work hard to develop and implement a successful strategic business plan that meets the needs of Saskatchewan residents,” commented Styles.

BCE announced they are acquiring Manitoba Telecom Services (MTS) in late April of this year.

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