SaskTel releases annual report, net income of $126.7 million

SaskTel released its annual financial report on Wednesday and the crown corporation exceeded its net income target by $20.9 million.

SaskTel reported its 2015-2016 net income of $126.7 million, which is an increase of 2.2 per cent from last year. The Crown-owned utility’s operating revenues were at $1.57 billion, which is a 0.6 per cent decline.

“As changes to customer demands, technology, competition, data traffic and regulations continue their rapid advance, we are extremely pleased to report a higher than anticipated net income,” SaskTel President and CEO Ron Styles said.

“SaskTel responded to these challenges by continuing with its cost-containment strategy, optimizing on its legacy services, and introducing new competitive services into the market, and the corporation is beginning to see the results of these strategies in its 2015/16 net income.”

Styles said discontinuing obsolete products has and will be a part of their cost-saving strategy. He said about 70 to 80 products have been discontinued since he became CEO. Shutting down the CDMA wireless network in mid-2017 will be one of their more noticeable saving strategies.

The crown corporation said that cost management coupled with continued revenue growth in key business areas, including wireless, maxTV, internet, data, equipment and new products resulted in SaskTel exceeding its net income target by $20.9 million.

“SaskTel continues to deliver on its commitment to deploy next-generation technologies including increased bandwidth and cellular infrastructure, broadband upgrades and fibre to the home,” Minister Responsible for SaskTel, Jim Reiter, said.

“SaskTel has been integral to the growth and development of the province and Saskatchewan people are connected like never before with the ability to use technology to keep in touch with family and friends, as well as conduct business.”

The growth of the “fusion” service providing method will be an expansion priority for rural areas. SaskTel said this wireless technology can provide wireline connection speeds from terminals up to 38 kilometres away. Currently, 4,000 rural customers have access to fusion.

Sale Talks

Talks of potentially selling the Crown-owned corporation were restarted with the potential sale of Manitoba’s MTS to Bell, and the province ordered a risk assessment to look at how competitive the last regionally owned telecom company can be.

READ MORE: SaskTel profits may be at risk following MTS buyout: report

Styles said they are facing more competition than ever from companies like Bell, Telus, and Shaw. Despite this, SaskTel has held on to a major portion of the market share.

“Between 2010 and today, over 50 per cent of our revenues today are from products and services that didn’t exist in 2010,” Styles said.

SaskTel is the main communications provider in Saskatchewan and has approximately 1.4 million customers across the province.

Styles and Reiter said that talks do happen with competitors regularly, but buying SaskTel isn’t the subject. These discussions center on issues like cellular roaming, and contracts to use SaskTel infrastructure.

However, there is a situation where selling the company may come up.

“If we did get an unsolicited offer tomorrow, we don’t have a mandate to accept that. We also don’t feel like if it was a lucrative offer we don’t really have a mandate to reject it,” Reiter said.

“So that was the position when the Premier mentioned to possibility of a referendum or something like that.”