SaskTel has plans to tackle risks posed by Bell takeover of MTS
Report was SaskTel's response to assessment released in June
Saskatchewan's provincially-owned telecommunications company says it has strategies to address the risk posed by Bell Media's proposed takeover of Manitoba Telecom Services.
SaskTel says the $3.9-billion MTS and Bell deal — if approved — represents regulatory, competitive and financial risks for SaskTel.
But the company says most of the risks existed before the deal and have already been assessed.
"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.
The report was SaskTel's response to an assessment released in June, which said the takeover poses serious risks to SaskTel.
- Bidding war for SaskTel could draw in Bell, Telus: analyst
- Start the bidding at $4.1B, Premier Brad Wall indirectly puts pricetag on SaskTel
- MTS sale to Bell has some Manitobans worried about price hikes
The assessment said the reduced number of carriers in Manitoba could lead the federal government to create incentives for additional wireless competition. Such measures could reduce costs for competitors and increase costs or restrict expansion for SaskTel, it said.
The report said there's also a risk that establishing Winnipeg as a western headquarters for Bell could erode SaskTel's share of the Saskatchewan business market.
SaskTel said it has been dealing with competitors across all lines of business for nearly 30 years.
"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.
If the sale is approved, SaskTel could be the only major regional player in Western Canada, surrounded by two of the large players: Telus in the west and BCE to the east.
"If this occurs, it provides additional credence to the argument that SaskTel must not be treated the same as the large national players from a regulatory perspective," SaskTel said in its document.
The response notes SaskTel needs an annual capital investment of close to $300 million. But it also says that's a concern for the government because provincial debt is growing. According to a mid-year budget update released last month, public debt is up $447.7 million to $15.2 billion.
New Democrat Warren McCall said the response confirms SaskTel has been providing good service in a highly competitive industry.
But McCall said he's concerned the document doesn't address a proposed law that would allow the Saskatchewan government to sell up to 49 per cent of a Crown without it being considered privatization.
"You do a risk assessment to fully consider what the concerns are and I guess what we see in this report is no acknowledgment of one of the biggest concerns, one of the biggest risks facing the future of SaskTel," said McCall.
The MTS and Bell deal still requires approval from regulators, including the federal government and the Canadian Radio-television and Telecommunications Commission.