REGINA – SaskTel posted a $76.4-million profit in 2014, which continues a decline in net income for the Crown corporation over the last four years.
SaskTel’s annual report released Monday showed a steady increase in operating revenues, ending the year at $1.23 billion – which is up $25.3 million from 2013.
President and CEO Ron Styles said reasons for declining profits compared to revenue include new capital investments in 4G mobile technology, and declining usage of landline telephones along with accompanying long distance services.
“You’re talking about $15 million to the bottom line on those legacy items,” Styles said, estimating a $90-million loss over the last six years.
Styles also said a federal government decision through Industry Canada to set roaming rates has cost SaskTel $8 million over just six months.
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The government-owned telecommunications company repeated complaints about pricing variations for the “big three” providers of cell phone services in Canada (Bell, Telus and Rogers). SaskTel said carriers charge as much as double for services in provinces where there isn’t a fourth major carrier.
Shift away from cable
SaskTel will be offering the subscription video-on-demand service, CraveTV “in the coming weeks,” Styles said. CraveTV had previously only been available to Bell and Access customers in Saskatchewan.
Styles doesn’t believe streaming services, such as Netflix, are resulting in many consumers ‘cutting the cord’ on television subscriptions – yet.
“People still like to have a basic package of services. Netflix obviously doesn’t bring you your local TV stations,” Styles said. “It seems to be a complement right now. Long term, we’re going to have to wait and see.”
SaskTel executives also addressed the CRTC’s recent Pick and Pay ruling that orders television providers to offer a “skinny basic” package of channels for no more than $25 per month. No decisions have been made on what channels SaskTel will provide, but Styles didn’t expect many customers to switch over to a slimmed down service with fewer channels.
All providers, including SaskTel, will have to provide every channel on an individual-purchase basis by March 31, 2016.
Styles acknowledged research showing a “substantial drop” in regular television viewing habits in the United States, but suggested most of that is related to cable television – not the software-based product SaskTel offers that allows users to add applications such as Facebook to their package.
According to the 2014 report, SaskTel increased its maxTV subscriber base by more than 2,500 from 2013.
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