SaskTel posts profit amid questions of 5G development and labour negotiations

SaskTel says they saw a strong fiscal year in their annual report, posting profits of $127.4 million, a $6.4 million increase from the previous year.

However, the Crown corporation is not without challenges posed by unsettled collective bargaining agreements, questions on Huawei’s involvement in the 5G network rollout, and continued competition from the big telecommunication companies.

SaskTel CEO Doug Burnett says the company is doing some 5G trials with Bell and Telus, but tensions between China and Canada leave the question of using Huawei technology unanswered.

“The whole Huawei situation has slowed down some of the trials. We’re working with some other vendors,” Burnett said.

“We anticipate we may start to roll out some 5G trials in 2020 or 2021.”

Minister responsible for SaskTel Don Morgan said they are still waiting on direction from the federal government on whether or not Huawei technology will be part of 5G in Canada.

A decision was originally expected in the fall, but Morgan said it has likely been pushed back to after the October federal election.

Morgan said the sooner they can get a concrete answer from Ottawa, one way or the other, the better.

The opposition’s critic for SaskTel, Warren McCall said the annual report should include more information on the implications of Huawei’s uncertain Canadian 5G involvement.

“At the very least they should have some kind of consideration in terms of what this means for dollars and cents for the people of Saskatchewan, what the options are and if there’s a plan B in terms of advancing to a 5G network,” McCall said.

Morgan said his understanding is new towers will contain “universal infrastructure” that can be used with any wireless carrier.

In June, employees of the SaskTel subsidiary SecurTek voted in favour of a strike mandate in their ongoing contract negotiation. Talks between SaskTel employees also reached an impasse, and a strike mandate vote is expected in the near future.

“Our goal is to get people back to the bargaining table rather than through the media or through job action,” Morgan said.

“As for it being disruptive, I know SaskTel has a variety of contingency plans.”

Burnett said they’re a fair way away from any potential job action, but if it comes to that he said there would be little customer disruption.

He added that SaskTel would only consider a lockout if they had to use their contingency plan.

McCall said the province should be looking at SaskTel’s dividend and debt level as collective bargaining continues, noting his understanding is that the union is not asking for “a prince’s ransom.”

SaskTel is paying a $116.3 million dividend to the province. The debt ratio is currently at 46.6 per cent.

“In terms of making sure the workers are paid a competitive wage in a sector that is highly competitive, and always changing, that human capital is tremendously important,” McCall said.

On the competition side, SaskTel saw about a 1.5 per cent decline in its wireless market share as major telecoms like Rogers, Bell and Telus continue to forge a foothold in Saskatchewan. Burnett said their current market share was around 61 or 62 per cent.

On the cable side, he added Saskatchewan appears to be one of the few jurisdictions with more people signing up. The Crown saw nearly 2,000 more clients hook up to their maxTV service, hitting 112,853 customers.

Over the next year, expanding infrastructure will be a priority for SaskTel, aiming to upgrade cellular service in 41 rural communities by March 31, 2020. Communities are announced as work begins.

In the previous fiscal year, they did similar work in 50 communities.