Future of SaskTel is a debate worth having
Like the childhood advice to avoid discussing religion, sex and politics in polite company, for years in Saskatchewan any politician concerned about self-preservation knew never to muse aloud about selling Crown corporations.
How things have changed, as Premier Brad Wall now openly discusses the future of SaskTel, which is both Canada’s last provincial government-owned phone company and soon the only provincial phone company left.
Necessitated in part by Bell Canada proposing to acquire Manitoba Telecom Services (MTS), SaskTel’s future should be debated.
For many people in Saskatchewan, the debate has an existential feel about it.
Born in 1908 by an act of the Saskatchewan Legislature, SaskTel’s best strategic opportunities are long behind it.
As the 1990s began, all three prairie provincial governments owned phone companies: SaskTel and, on each side of us, MTS and Alberta Government Telephones (AGT).
Rather than consolidate operations or spin off the companies under one larger, publicly traded company, each went their own way.
In 1991 AGT was renamed Telus, privatized and grew into Canada’s second largest telecommunications company.
MTS was privatized in 1996. Within a couple of years it was 20 per cent owned by Bell Canada and finally this year, if approved, a $3.9 billion all stock acquisition will make it all Bell’s.
All along, SaskTel stood alone and firm that only the government could own it.
A well-run company, fiercely and proudly local, SaskTel is frequently on Canada’s Top 100 list of Top Employers. But how long it will continue to flourish, never mind survive, in a country divided by Telus and Bell is an open question.
In the ubiquitous and investment-heavy world of wireless, SaskTel enjoys strong local customer loyalty.
But its 620,000 subscribers are dwarfed by Rogers’ 9.9 million, Bell’s 8.7 million and Telus’ 8.4 million, according to the CRTC’s 2014 Communications Monitoring Report.
With billions of dollars of invested capital over the years and the frequent need to upgrade and spend hundreds of millions more on fibre optic, high speed wireless and rapidly evolving new technology, SaskTel continues to be profitable for now.
SaskTel’s net income, or profit, was $97.1 million during calendar 2015 on total revenues of $1.3 billion.
Premier Wall has not committed to selling SaskTel but has set out several conditions that point that way: first, there must be an offer; second, it must be enough to eliminate the province’s total operating debt (that number is $4.1 billion); third, assurances must be given on jobs saved and rural coverage upgrades; and fourth, the people will decide the sale, likely by a referendum.
On one level, many people wonder what business a government has being in business. If SaskTel can be sold and the province can become debt-free and get good or better service, why not? After all, it is 2016. Others feel a deep loyalty to SaskTel and argue that profits should be returned to government and what is wrong with the government selling us smartphones and wireless, and continuing to try underpricing the wireless giants as long as they can?
Besides, the reasoning goes, if a larger Canadian company buys SaskTel we won’t be as Saskatchewan anymore.
The debate, at the outset, is more nuanced than typically political left and right.
Traditional leftists of organized labour and the NDP see this issue as their salvation and will bitterly oppose even a discussion of selling SaskTel.
Many younger progressive millennials, who have grown up on the laps of Samsung and Apple, do not have the same reflexive dislike of Bell or Telus.
On the political right, alongside the “get government out of business” people are those who see SaskTel as a valuable “shop local” enterprise worth supporting.
This debate should involve facts — economic and political — and should animate many opinions.
But the best part is that after a generation of silencing anyone who would dare question the Crowns, it is a debate worth having.
John Gormley is a talk-show host, lawyer, author and former Progressive Conservative MP. He can be heard weekdays, 8:30 a.m. to 12:30 p.m., on News-Talk 980 CAME.