REGINA – Despite increased competition in the province, SaskTel ended 2013 with net income of $90.1 million and operating revenues of $1.2 billion, up $22.7 million from 2012.
But according to president and CEO Ron Styles, that amount could drop to $59.2 million next year due to unintended consequences of new federal regulations that encourage the presence of four wireless companies in all regions of the country. Styles is scheduled to meet with federal government officials this week to express concern over prices in provinces with four carriers, such as Saskatchewan, which he says are much lower than in provinces where only the big three incumbent carriers do business.
SaskTel has previously released data showing that Rogers, Telus and Bell charge $145 a month for national cell packages that cost between $65 and $75 in Saskatchewan.
“SaskTel had a strong financial year despite intensifying price competition in the Saskatchewan market and regulatory changes in the wireless segment that added costs and reduced revenues to the business,” Styles said in a statement. “This will be a challenging year for SaskTel from a financial perspective as both the unintended consequences of federal policy and targeted pricing by our competitors in the Saskatchewan market will significantly impact our bottom line.”
The company credited its revenue increase to growth in its wireless, maxTV, Internet and data revenues, due to increases in customers and average revenue per user. The lower than budgeted net income was attributed to a decline in fair value of its sinking fund investments.
Wireless revenues rose 3.9% to $471.8 million in 2013, and total wireless accesses increased to 615,694 at year end, up 8,035 due to organic growth and legacy wireline customers abandoning their traditional wireline services for a wireless alternative.
Customers continued to migrate from voice-only devices to data-capable devices such as smartphones, and the number of data-capable devices increased to 412,993 in 2013, up 16.8% from 353,490 last year. The adoption of these devices also resulted in customer migration to more expensive and feature rich data plans, which increased the average revenue per subscriber from $62.99 in 2012 to $64.39 in 2013.
After surpassing 100,000 customers in November, maxTV recorded a year-over-year increase in revenues of $10.0 million. Increases in average revenue per customer of $3.57 can be attributed to increases in rates to offset increases in content costs, increased adoption of high definition services, and increased penetration of digital video recorders.
Internet and data services revenues were up by $6.7 million in 2013 as customers selected faster Internet service packages and were early adopters of SaskTel’s fibre-based service infiNET, driving an increase in average revenue per access. Growth of 4,713 (2.0%) Internet accesses during the year also contributed to the growth in revenues.
SaskTel’s total capital expenditures for 2013 were $355.8 million, up $26.0 million from 2012.
