The Financial Post reports in its Tuesday edition that SaskTel should prepare for a less profitable future if BCE gets the green light to take over Manitoba Telecom Services. The Post's Emily Jackson writes that is the prediction of a risk assessment conducted in the wake of the pending deal.
The independent risk report for the provincially owned Crown corporation argues that SaskTel would be under increased pressure if Bell becomes a more powerful player in the Prairies.
The report did not put a number on the expected losses, but said it expects smaller annual dividends will be paid to the province. SaskTel's dividends have been on the decline since 2010, although its corporate taxes crept up over the same period.
The report pegged the most fundamental risk as potential federal policy changes to bolster competition if Manitoba loses its fourth carrier. If the federal government tries to fill the void with new entrants, the preferential treatment they receive could hurt an incumbent like SaskTel. The report also predicted the new Bell headquarters in Winnipeg could chip away at SaskTel's business clientele. Potential competitive manoeuvres by Rogers and Shaw were also cited as risk factors.
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