Bidding war for SaskTel could draw in Bell, Telus: analyst

A billion-dollar bidding war could erupt if SaskTel is put up on the auction block, a telecommunications analyst says.

'Extraordinary premium' might be once-in-a-lifetime opportunity, Lawrence Surtees says

The government of Saskatchewan wants a risk analysis done on its telephone company, in the wake of news earlier this month that Bell will buy Manitoba Telecom Services Inc. (Neil Cochrane/CBC)

A billion-dollar bidding war could erupt if SaskTel is put up on the auction block, a telecommunications analyst says.

Bell Canada and Telus would both be interested, according to Lawrence Surtees, a telecommunications consultant with IDC Canada.

He was reacting to Tuesday's announcement that the Saskatchewan government will do a risk analysis on the Crown telephone company.

That follows Bell's announcement earlier this month that it would take over Manitoba Telecom Services Inc.— a $3.9-billion deal.

Surtees says with that kind of money being talked about, it only makes sense for the Saskatchewan government to consider its options.

"It's prudent. It would almost be irresponsible if the government didn't think what this all means and where to go from that," Surtees told CBC Radio's Morning Edition host Sheila Coles.

Although Premier Brad Wall had previously said the government would not sell any of the big Crown corporations (which also include SaskPower, SaskEnergy and SGI) without campaigning on it, Wall announced Tuesday that his government will proceed with the SaskTel risk analysis.

Surtees said such an analysis would look at the strengths, weaknesses, opportunities and threats surrounding SaskTel and would presumably include an estimate of what the company is worth.

It may look at the possibility of a once-in-a-lifetime chance to sell the Crown for an "extraordinary premium," he said.

"In SaskTel's case, we could envisage a little mini-bidding war if it was put on the block," Surtees said.

"Telus to the west would definitely see SaskTel as attractive to thwart Bell's ambitions and Bell would naturally want to keep going as a juggernaut."