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Nanuuk said:
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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Nanuuk said:
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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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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Nanuuk said:
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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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.
 

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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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Neild said:
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, wouldn’t 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 can’t 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 don’t see the link between the Sasktel Max and the other crown corp. revenues/provincial taxes that you claim exists??
 

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Nute said:
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.

Nute said:
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.

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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Nanuuk said:
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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Here's some googled info on SaskTel Max financials as of 2003:

http://www.bradwall.com/MLA Reports/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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Billybob said:
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.
I would think SaskTel can get by on their own without CIC shifting anything from the other Crowns. Some numbers I saw recently said they raked in a cool $950 million last year.

Although if you were meaning indirect support, that's probably a big factor. I don't doubt SaskEverything must buy their phone stuff from SaskTel at full fare, and vice versa.
 

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i still want sasktel MAX...just to check it out....but its not im my community...its only in major citys...when i contacted SASKTEL and asked then when its going to be avaliable to us they said "We will release it to the public when it comes to your community"....leaving me with no idea??
 

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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.

Sasktel is a defacto monopoly in local phone access only but that's only because nobody has decided to compete against them. The CRTC required them to implement the infrastructure for local phone access competition back in 2001 or so. Local access rates (again regulated by the CRTC) are among the lowest in Canada.

All other Sasktel product lines are fully competitive - cellular, television, internet, Securtec alarms, etc. The only subsidized service Sasktel has rolled out that I know of is rural Highspeed, specifically CommunityNet and CommunityNet II.

I have MAX; call display on my TV rocks.
 

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I was speaking with an IT guy with Max. It looks like 2006 should bring HDTV. They are working on the final details now as to what hardware to use. If this turns out to be true then Shaw might be in major trouble in Sask. The lack of HDTV is what holds me back from Max now.
 

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knowbodies said:
that's only because nobody has decided to compete against them.
It's not a matter of someone deciding to compete, it's that SaskTel controls the infrastructure and put up huge barriers of cost and complexity, in order to thwart competition. This conduct could be seen as anti-competitive and has been cited as one of the reasons the CRTC ruled against them in the recent VOIP decision.

knowbodies said:
All other Sasktel product lines are fully competitive - cellular, television, internet, Securtec alarms, etc. The only subsidized service Sasktel has rolled out that I know of is rural Highspeed, specifically CommunityNet and CommunityNet II.
I can't speak for all the product lines you describe but I can say that an independent Max is nowhere near competitive. The R&D alone probably exceeds revenues. But more significantly, the (true) advertising and promotion costs of Max are huge, far too huge to be supported by revenues or any realistic projection of revenues. That makes this a subsidized service.
 

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I can't speak for all the product lines you describe but I can say that an independent Max is nowhere near competitive. The R&D alone probably exceeds revenues. But more significantly, the (true) advertising and promotion costs of Max are huge, far too huge to be supported by revenues or any realistic projection of revenues. That makes this a subsidized service.
You need to take an accounting class. MAX R&D expenditures result in assets that are amortized. The question you should be asking is whether Sasktel's revenues from MAX exceeds it's MAX operating costs plus amortization costs.

According Sasktel 2004 Annual report, MAX subscribers surpassed 25000. That number is surely much higher by now. At (wag) an average $70 per month you're looking at revenues $21M per year.

It's your turn now. I provided you with reasonable revenue numbers. Let's see you prove your point with some actual cost figures.

http://www.sasktel.com/about_sasktel/financial_reports/

(wag) my wild assed guess is based on the average price for MAX bundles advertised on Sasktel's website rounded to the nearest $10. Ancillarary revenues from products such as Front Row and TV call display were assumed to be zero.
 

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Free Max (y)

The only thing keeping me using Sasktel Max is that you can receive all their subscription content with a basic subscription using VLC and sniffing out the multi-cast IP's for each channel.
 

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fearmachine said:
The only thing keeping me using Sasktel Max is that you can receive all their subscription content with a basic subscription using VLC and sniffing out the multi-cast IP's for each channel.
I'm sure this doesn't belong here. There are sites that specialize in stealing TV. Go find them.
 
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