SaskTel's revenue drops $30M, annual report shows

The minister responsible for SaskTel says the Crown corporation can stay competitive despite increasing pressure from the private sector. 

Minister Don Morgan spoke to reporters Wednesday at the release of SaskTel's annual report for 2017-18, which shows it posted $1.2 billion in revenues — with a net income of $121 million — and paid nearly $90 million in dividends to the Crown Investment Corporation. 

"There is private sector competition, so over the last number of years [SaskTel has] developed a keen competitive edge and I think will continue to thrive in an increasingly competitive market," Morgan said.

"The market is changing. There's a challenge with cord cutters, there's increased competition. but I think the corporation is well positioned to deal with those challenges."

SaskTel posted a $29.6 million drop in revenues from 2016-17, which is attributed to factors like changing customer habits, the current economic climate and regional wireless pricing from competitors like Telus, Bell and Rogers.

Some of these private competitors are pricing products up to 40 per cent lower in Saskatchewan than other provinces with the hope of gaining more of SaskTel's wireless market share. SaskTel currently controls 67 per cent of the market, about 1.5 per cent less than several years ago.

The report shows 40 per cent of SaskTel's revenue comes from wireless, while services like its maxTV package, data and Internet comprise a 27.9 per cent slice of its revenue pie.  

SaskTel's annual report also hows that as of Mar. 31, 2018, it had 607,448 wireless customers, a dip from the previous year when the figure was 615.882. 

SaskTel attributes most of that decline to cancelling a CDMA network, which rendered any devices using out of service.

The report shows between March 2017 and March 2018 SaskTel gained some 3,600 Internet customers, including subscribers of maxTV. 

Expanded rural service not just about business

SaskTel says it's in the process of a four-stage plan to offer rural residents better cellular and high-speed Internet services. 

Acting president and CEO Doug Burnett said it has already installed fusion towers in 34 communities and is planning to improve service to another 100 rural communities. 

He told reporters he expects the installation of fusion towers to be profitable, and the additional expansion, "will be very close to break even."

Morgan acknowledged the ongoing push to improve access to rural communities is driven by social policy, not purely a business decision for the Crown. 

"The analogy that I would refer you to is SaskPower where all the electrification took place in the 1950s, not always business decisions that would make sense on an individual basis, but on a province-wide basis certainly it was the right decision to do at that time," Morgan explained 

"I think some of the decisions SaskTel is making now would be consistent with that type of approach."