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post #16 of 46 (permalink) Old 2005-09-23, 02:17 AM
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Quote:
Originally Posted by jeff1960
Huh?? In over 15 years I cannot remember a power outage that took out my cable signal but not everything else. What good is a signal without power to the TV!!
Where I live cable is out probably 10X as often as power. Perhaps it is because of the reason Mithan states.
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post #17 of 46 (permalink) Old 2005-09-23, 02:21 AM
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Quote:
Originally Posted by Mithan
Overall guys, Max is pretty damn good and is getting much better. I am extremly impressed that Sasktel has been able to pioneer this into their entire system with the quickness and quality they have done it.

Cable is still better today, but I think by 2007, that difference will be gone.
Thanks for a good review. The final conclusion, that it's "pretty damn good" seems like it was biased around the somewhat unique 'features' of the max offering (on demand, rew/ffw, pay per view, onscreen caller ID)

I'm not sure if you know but through PVR, satellite & cable both offer the on demand and rew/ffw features. Both of course offer pay per view, and most satellite receivers do onscreen caller ID.

The deal breaker I think for a lot of people is picture quality on sets 27" and up is not good. The behavior of the STB can be an issue too I'm told.

My one question would be whether you'd be as favorable of the service if the price weren't so heavily subsidized?
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post #18 of 46 (permalink) Old 2005-09-23, 02:30 PM
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What makes you think the price is subsidized?
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post #19 of 46 (permalink) Old 2005-09-23, 04:34 PM
 
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It was in Sasktel's last annual report that Max is still losing money. With 22,000 subscribers province wide, it's far from profitability.
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post #20 of 46 (permalink) Old 2005-09-23, 07:08 PM
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Not being profitable is a far cry from being subsidized. Any new venture might take a few years or to realize a profit once you factor in capital investment.
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post #21 of 46 (permalink) Old 2005-09-24, 03:32 AM
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Originally Posted by Nanuuk
What makes you think the price is subsidized?
Nanuuk, if you've ever placed a radio, billboard, newpaper or TV advertisement, you'd know how frighteningly expensive they are. SaskTel Max has wall to wall advertising. There is simply no way whatsoever they can come anywhere close to breaking even on it. A month's worth of their advertising exceeds Max's revenues for a year or more!

The way they do the books leaves that out, but even without reflecting the true cost of advertising, Max loses money constantly. Crack a newspaper and watch the business section.
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post #22 of 46 (permalink) Old 2005-09-24, 03:35 AM
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Originally Posted by Nanuuk
Not being profitable is a far cry from being subsidized. Any new venture might take a few years or to realize a profit once you factor in capital investment.
Offering something for 10 cents on the dollar that it costs to supply is the epitome of subsidized.
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post #23 of 46 (permalink) Old 2005-09-24, 10:48 AM
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That logic could be applied to a cable companies digital offerings or VOIP offerings. Businesses often operate an unprofitable venture in its early days to also attract customers for ancilliary products. They also have to price the service competitively just to play the game. The question becomes how long can they afford to keep that up before getting out of the business.
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post #24 of 46 (permalink) Old 2005-09-26, 12:27 PM
 
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Quote:
Originally Posted by Nanuuk
The question becomes how long can they afford to keep that up before getting out of the business.
They (SaskTel) can keep it up as long as there are tax payers in Saskatchewan. A Cable (private sector) can't because they don't have the profits of SaskPower, SaskEnergy and Saskeverything else to fall back on. Thus the Gov. in compitition with private sector debate in Sask. goes on.
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post #25 of 46 (permalink) Old 2005-09-26, 08:30 PM
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It's true what Billyboy says, with real private or public businesses (ie: not government Crowns) there has to be some realistic hope for it to eventually break even or turn a profit. Obviously no company in the universe could afford the Sask Tel Max advertising budget and ever hope to break even.

In fact, if a private company were ever found to be doing something like that, they can be investigated and face consequences for being 'anti-competitive', 'predatory pricing practices', or 'dumping'.

The timing is kind of funny - yesterday I was called and participated in a lengthy survey commissioned by.... you guessed it.... SaskTel Max. This was a rather long and detailed survey, conducted by a well known survey group. I have some experience in this area and I know surveys of this type can be extremely expensive. I doubt, for example, that Access, Image, or Shaw would have the deep pockets to afford this magnitude of survey.

Not that this is *all* bad for the consumer. SaskTel using funny money to subsidize internet & TV will have the effect of making sure other cable and satellite operators in this region aren't jacking their prices up too much. It's just that citizens need to be aware it's our high taxation and utilities that allow this, not the ingenuity of the Crowns themselves.

Last edited by Neild; 2005-09-26 at 08:39 PM.
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post #26 of 46 (permalink) Old 2005-09-26, 08:37 PM
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PS - for what it's worth I made sure my answers to the survey were objective and customer based as possible. I said I wouldn't consider SaskTel Max unless they had true high definition and more connections per household.

That in effect is saying I'd like to see fiber run to the household. Now that is a deep pocket type of investment I wish SaskTel was funneling their money into, instead of pricey surveys and wall to wall advertising.

Ideally, the government would help fund a fiber (or better) infrastructure and then open it up to competitors including SaskTel. Each participating competitor would pay their fair share of overall upkeep on the infrastructure based on their relative usage.

SaskTel, Access, Shaw, and others could then compete for customers on a true value-based level playing field.

One customer might choose Access for example because they like the local programs and the 24x7 help service. The next person might pick SaskTel because they get alarm monitoring included in the bill. They could compete on features, prices, and services.

That is more along the line of true competition and is sort of how (eventually) long distance competition came into being.
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post #27 of 46 (permalink) Old 2005-09-28, 01:37 AM
 
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Quote:
Originally Posted by Neild
It's true what Billyboy says, with real private or public businesses (ie: not government Crowns) there has to be some realistic hope for it to eventually break even or turn a profit. Obviously no company in the universe could afford the Sask Tel Max advertising budget and ever hope to break even.
...
citizens need to be aware it's our high taxation and utilities that allow this, not the ingenuity of the Crowns themselves.
I have recently switched over to Sasktel Max, due to dissatisfaction with my previous providers lack of customer service. Sure they offer HD, which is great for my new DLP, when the HD works. I had them out 3 times in attempt to fix.

Your discussion has intrigued me. Correct me if I am wrong as I am by no means a CIC expert, but are the Saskatchewan Crown corporations not all run as separate entities, most of which are profitable? I read that not only did Sasktel not cost tax payers money in 2004, but they paid in the tune of $85 million in dividends to the Saskatchewan government, which in theory should reduce the burden on Tax payers. And if indeed the advertising budget for Sasktel is so colossal, wouldnít the overall current debt ratio be a little higher than 25%? I am missing something in your equation here.

When any company, be it private or public, launches a new product/service, of course it is going to have to be either internally or externally financed, AKA subsidized until it turns profitable. Sasktel seems fortunate enough to have a profitable portfolio which it can pull funds from, none of which, as far as I can tell come from Saskpower, Saskenergy or any of the other aforementioned crown corps.

I canít argue with the high taxation in this province, but from the people I have talked to we have some of the lowest utility rates in Canada, and like I said before I donít see the link between the Sasktel Max and the other crown corp. revenues/provincial taxes that you claim exists??
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post #28 of 46 (permalink) Old 2005-09-28, 06:51 AM
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Originally Posted by Nute
I read that not only did Sasktel not cost tax payers money in 2004, but they paid in the tune of $85 million in dividends to the Saskatchewan government, which in theory should reduce the burden on Tax payers.
Look at it this way - in order for SaskTel to return $85 million to the politicians, they had to rake in a surplus of say $200 million. Through waste and mismanagement, that $200 million was reduced to say $130 million.

Then they keep retained earnings of say $45 million to help keep up the facade they are a 'competitor' not a monopoly. The remaining $85 million goes back to our huge government to waste as they see fit.

Wouldn't it be better for the citizens if SaskTel just charged individuals and businesses $200 million less??? That $200 million would have done a lot more for the economy than it has in the control of SaskTel & the treasury.

Let's relate that back. $200 million across 1 million residents. Imagine rebates or phone bill reductions of $200 per person per year. Say your family has 5 people, that's a tax-free $1000 to you. You'd have put that $1000 to work in the economy and maybe a few jobs would have been retained here and a few less companies would have moved out of province. Instead of $33 per month for local phone service, it could have been a more fair and reasonable $15.

But instead people are content to have this phoney warm and fuzzy, justified by the largely symbolic act of returning money to the treasury. They've been conned into equating 'profitable' and 'successful'.

As I see it, the money flows like this:
SaskTel overcharges citizen for essential utility, extra money goes back to government treasury

It's a tax that SaskTel collects and takes a tidy share for their part in 'handling'. It would almost be more efficient to just tax us than have the money do a two step through SaskTel, no doubt shrinking in the process.

Imagine watching a bully rob everyone on your street and then applauding him because he kicked in a little bit of his take to the neighborhood charity fund.

To my mind, Crowns making a sizeable profit means they overcharged and didn't plan or manage that well. But Crowns making grotesque profits means grotesque mismanagement and abuse. To take those gross profits and kick them back to the politicians that turn a blind eye to all this just adds insult to injury.

Quote:
Originally Posted by Nute
When any company, be it private or public, launches a new product/service, of course it is going to have to be either internally or externally financed, AKA subsidized until it turns profitable.
That's not necessarily true. It's entirely possible to launch products and services that are cash flow positive. If SaskTel Max is so far from profitable that it needs such heavy subsidies one might ask what business they have offering it then? If SaskTel Max can only get subscribers at price that's below market value and through massive advertising budget, maybe that money could be better spent elsewhere?

It sounds like you have numbers at your disposal. Share with us then the total amount SaskTel & its subsidiaries pay in advertising SaskTel Max per year. Tell us the gross and net revenues of SaskTel Max. People can judge for themselves if this is really a situation where they are just helping get this venture going a bit or if (as I suspect) there is zero chance of it ever standing on it's own two feet.

Quote:
from the people I have talked to we have some of the lowest utility rates in Canada
Which government ministers and crown corp employees you been talking to? Kidding (sort of) but the facts just don't support this. Look at last year for hard evidence if you want. Even with some creative accounting that objective experts said looked pretty funky, the government still had to distribute $138 in overcharge refunds on utilities. No doubt the same will be happening this year too.

SaskPower has been raising rates at 3-4X the CPI, SaskEnergy just applied for a 27% hike. By your own admission SaskTel is funnel mammoth overcharges back to the treasury. None of this supports your contention of low utility rates.

Keeping this on topic, like I say, I'm glad there's a low priced alternative out there to keep the other players competitive and to help address your situation of bad service. You're obviously content with 2 TV outlets and small low resolution picture. But please don't try to say the Max TV service is in any way helping keep taxes down when it's actually the opposite.
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post #29 of 46 (permalink) Old 2005-09-28, 07:09 AM
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Originally Posted by Nanuuk
They also have to price the service competitively just to play the game. The question becomes how long can they afford to keep that up before getting out of the business.
You just stated the fallacy right there. The gov't makes the rules, the gov't enforces the rules. The gov't gives monopoly status to SaskTel. They are under no pressure whatsoever to price the service competitively or operate fairly.

The Sask's premier's signing of Meech Lake gave SaskTel an additional 10 years of monopoly status. In year 9 and 10 of that deal was the first time you saw noticeable reductions in long distance and bundles. Coincidence?

SaskTel was the only phone company in North America not to participate in online white page listings. Why? Because of their own little phone listing monopoly, Direct West.

Sask is the only place in Canada where you can't pay your utility bills through E-Post. Why? SaskTel's E-bill service might have something to do with that.

SaskTel is the only jurisdiction in North America that's still blocking VOIP. It's gotten so bad that CRTC finally ordered them to stop it. But instead of complying, they've wasted your money and mine launching media and legal campaigns to try and overturn this ruling.

Again I throw the challenge out there. If SaskTel is as lean, competitive, inventive, and profitable as some would have you believe, then let's have them share the infrastructure to everyone that wants to compete and make rules that ensure a level playing field.

A competitive and efficient SaskTel should do just fine in that environment right? So why do they fight tooth and nail to make sure the open competition and level playing field never takes place?

Think about these points and don't let the misdirection of an $85 million treasury transfer blind you to the bigger picture of what's really happening. Ask yourself where that $85 million came from in the first place.
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post #30 of 46 (permalink) Old 2005-09-28, 07:44 AM
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Here's some googled info on SaskTel Max financials as of 2003:

http://www.bradwall.com/MLA%20Reports/MLA_May_2003.htm

It's from a politician so you never know, but it hasn't been removed for being inaccurate either.

The short version is:
- at least $21 million spent promoting SaskTel Max (possibly as high as $60 million?)
- 5,000 customers
- 2% market share

In other words it's costing them at least $4,200 per customer. At $40/month with say 10% profit margin, that means they should reach break-even in just 1,050 years! I suppose with a larger market share resulting from the saturation advertising that could be reduced to just a few hundred years.

Also to anyone that thinks your utility money is being wisely spent by SaskTel:
http://www.tokyo7.com/rant.php?rant_id=59
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