REGINA – While SaskTel’s 2011 net income was $154 million, up 3% from 2010, the company told shareholders (the taxpayers of Saskatchewan) in its annual report released this week that net income is going to take a big hit in the coming year.
SaskTel’s budgeted net income for 2012 is $91.1 million. The 41% decrease is due to reinvestment in networks, products, services and systems and increased competitive pressure on pricing and margins, the company reported today. SaskTel also recognized gains on the sale of two subsidiaries in 2011, which significantly increased net income in that year. Revenues for the year were $1.123 billion, up 1.2% from 2010, primarily driven by Max (high speed Internet plus IPTV) revenues due to increased number of customers and increased revenue per customer, and wireless revenues due to increased number of customers, increased smartphone sales and increased data usage. In addition, data and Internet revenues increased due to increased average revenue per unit from customers moving to more expensive plans.
SaskTel is budgeting $1.173 billion in revenue in 2012. The increase is primarily due to planned growth in wireless services, as well as Max, Internet and data services.
2011 expenses were $997.5 million, up $28.5 million from 2010 thanks to increased goods and services purchased to support revenue growth in wireless, Max, data and Internet revenues. SaskTel is budgeting expenses of close to $1.1 billion for 2012. The increase is mainly to support planned revenue growth in wireless and Max Entertainment Services as well as continued reinvestment in SaskTel’s networks.
In 2012, SaskTel is forecasting to invest $392 million in capital expenditures, a 47% increase over 2011. “A large portion of the growth expenditures will see capital investment to increase bandwidth to our customers. Capital investments will include continued cellular network upgrades to 4G, a cellular network upgrade to Long Term Evolution (LTE), network growth and refurbishment, further investment in Max Entertainment Services, and improved high speed Internet quality,” reported the company.
