REGINA – Provincial Crown Corporation SaskTel this week reported 2005 net income of $64.4 million, about $30 million less than 2004.
Overall operating revenues were $982 million and the profit hit came due to shortfalls at subsidiary Navigata Communications and a $23 million charge due to an early retirement program. SaskTel also announced that Navigata will be integrated into SaskTel to address the rapid changes in the competitive communications market and to more cost effectively serve its customers.
Navigata, SaskTel’s operations unit outside the province of Saskatchewan, has lost money since it was purchased in 2001.
“Despite operating in an increasingly competitive communications market, SaskTel continues to maintain a financially sound revenue base that allows the company to return benefits to its customers and the province,” said Deb Higgins, Minister Responsible for SaskTel, in a release. “ SaskTel’s first priority is to remain Saskatchewan ‘s communications company by sustaining profitability and long-term value through growth, operational efficiency and capital investment initiatives."
“The communications industry is not bound by geographical borders and is highly competitive. In order to remain a strong company that can meet the needs of our Saskatchewan customers, SaskTel’s core communications offerings must expand by growing its business out of province," added Robert Watson, president and CEO. “ Navigata will evolve into a 100% owned sales channel, based in North Vancouver, to sell SaskTel developed voice over internet products (VoIP) out of province as well as support and grow the existing customer base in Western Canada.”
Under the new structure, the operations and administrative functions of Navigata will be integrated into SaskTel and SaskTel will become the operating entity outside of the province. Navigata was successful in reducing operating losses from 2004 to 2005 by over 60%, however, will show a loss primarily due to a one-time write-down of property, plant and equipment, said the company.
Financial and operating highlights for SaskTel in 2005 include:
* Max Interactive Services grew to over 42,000 digital TV customers and SaskTel continued to expand the movie offerings of Max Front Row video-on-demand service.
* SaskTel has grown its revenues to $982 million in 2005, from $574 million in 1990, despite a reduction in long distance revenues of more than $260 million per year.
* A dividend of $57.9 was declared and $88.3 million paid to Crown Investments Corporation (CIC) in 2005 for a total of $972 million paid in the last 16 years.
* Over 2004 – 2005, SaskTel achieved $43.5 million in operational efficiency. Initiatives such as the Early Retirement Program (ERP) and other cost containment measures such as process improvements contributed to the savings realized in 2005.
* Its debt ratio of 28.3% is down from 72.2% as of December 31, 1990.
* Under phase II of CommunityNet, SaskTel Mobility deployed 21 out of 57 planned tower sites and now reaches over 80% of the population, serving virtually every community of 200 people or more, and every community of 100 people or more with a school.
* SaskTel Mobility’s capital expenditures for 2005 totaled $23.4 million with the majority invested in network expansion and improvement. SaskTel Mobility added 25 new cellular sites and three repeaters, 14 of them providing cellular service to areas with no previous cellular coverage. SaskTel Mobility added over 41,000 new accesses in 2005 and its cellular network now spans over 95% of the Saskatchewan population. As well as improving coverage, SaskTel Mobility launched Evolution Data Optimized (EV-DO) networks in Regina and Saskatoon , enabling speeds up to six times faster than what is currently available.
