The Globe and Mail reports in its Saturday edition that SaskTel is squarely in the sights of BCE, after the Toronto telco dropped $3.9-billion this spring to buy next-door-neighbour Manitoba Telecom Services. The Globe's Andrew Willis writes that BCE's strategy for winning customers includes owning sports franchises: the Maple Leafs, Raptors, Argos and Canadiens -- something SaskTel cannot emulate. What SaskTel is experiencing is an acute example of the pressures facing every telco, a list that includes incumbents BCE, Telus, Rogers, Shaw, Cogeco and Quebecor.
Governments are intent on keeping the pot boiling in the regulated sector, viewing competition as a benefit to consumers. The basic telco game plan in mature markets such as Canada's is simple: Expand your subscriber base, either at the expense of rivals or through acquisition, then make those customer relationships as sticky as possible. SaskTel is about the same size as MTS, with revenue of $1.2-billion last year and 1.4 million customer connections across wireless, land line and Internet divisions. The Crown corporation simply does not have the financial resources to get into an acquisition arms race with the other telcos. An auction is likely coming.
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