Start the bidding at $4.1B, Premier Brad Wall indirectly puts pricetag on SaskTel
Wall says criteria of any offer would have to 'eliminate operating debt' which is $4.1B
Premier Brad Wall suggested on Tuesday that any offer for SaskTel would need to cover certain criteria, including being able to eliminate the province's operating debt, which is currently $4.1 billion.
Wall reiterated earlier statements that the province does not have an offer on the table for the Crown corporation.
"If we get an offer and we think it generates a significant amount of money for the province, maybe enough to eliminate our operating debt, if it takes care of the jobs question in Regina, if it provides better coverage, we are at least going to take it to the people and we'll need someone to lead that process," Wall said.
"We won't act unilaterally. We won't break a promise we've made. We would want to go to the public in perhaps a referendum and we would have in this case Dustin Duncan, if it's the right deal, he would be advocating for it I'd expect."
Duncan is the new minister responsible for SaskTel.
"I think Dustin Duncan is one of our best communicators and managers and leaders in cabinet and, should all of that transpire, I think he'll be good on that file," Wall said.
The premier's comments caused a reaction from the Opposition. NDP leader Trent Wotherspoon said his party would fight any effort to sell the province's Crowns.
In May, Manitoba Telecom Services (MTS) was bought by Bell Canada Enterprises for $3.9 billion. The deal is still subject to federal government approvals.
- Court approves BCE friendly takeover of Manitoba Telecom Services
- MTS sale to Bell supported by only 23% of Manitobans, poll suggests
$4B price is in ballpark of MTS deal: telcom expert
Lawrence Surtees is a telecom expert who has been studying the industry in Canada for more than 35 years.
He said the premier is being pragmatic about any potential sale and has set a high bar for any potential suitor.
"I think if someone were to come and offer and it was significantly below what the debt amount is the province wouldn't even look at it I think that's basically between the lines of what he's saying," Surtees said.
Surtees said the new addition to the premier's messaging on any sale of SaskTel is the price.
"That puts a ballpark amount of around $4 billion which is within the range of what neighbouring MTS was sold for to BCE. That being said, he didn't come right out and say here's the value and here's what we would for sure accept. The rest of his remarks were no different than what he has been saying."
What the premier has been saying is that the province wants to keep SaskTel jobs here and improve coverage for its customers.
Surtees said SaskTel provides important economic development to the province while contributing an annual dividend that helps pay for things like health and education, both of which have kept it government owned for 108 years. In addition, he said SaskTel has some of the lowest rates in the country
"SaskTel has been retained by the government of Saskatchewan while almost every government in the world has been privatizing their telecom companies."
"I don't think anything he [Wall] said would make it more likely for someone to come forward."
Bell and Telus are most likely buyers: Surtees
Surtees said the most likely suitors for Saskatchewan's telecom are Bell — now on the eastern side of the border —and Telus on the western side.
Surtees does not believe the choice is simply to sell all of SaskTel or keep it.
"There have been other privatizations in earlier years Canada and elsewhere where governments have sold or taken a public Crown company public and selling just a certain amount of the stock and keeping majority control. I think that would be a compromise of both worlds."
In May, the premier asked for a risk assessment on SaskTel`s future in the wake of BCE's takeover of MTS.
The independent review found that SaskTel was at risk of losing net income because of potential risk factors.
For sale sign already up, says political scientist
Charles Smith, political studies professor at St. Thomas More College in Saskatoon, said he thinks the government is putting the cart before the horse.
I think what they're doing is saying we're going to try and get a good deal and then vote on it and it skews any potential referendum.- Charles Smith, political studies professor
"I think what they're doing is saying we're going to try and get a good deal and then vote on it and it skews any potential referendum," Smith said on CBC Radio's Blue Sky with guest host Stefani Langenegger.
"Rather than saying here's the pros here's the cons do you authorize as the people of Saskatchewan to sell this crown if so then we'll go out and look for a deal. In some ways, the for sale sign is up before we've negotiated whether the foundation is secure or not and I find that a bit surprising."
Smith said any sale of SaskTel would be a one-time lump sum deal and the province would not be able to get the Crown back.
"I think this is the beginning of a very passionate and strong debate in the province."
-with files from CBC Radio's Blue Sky