For Saskatchewan
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For Saskatchewan Table of Contents 1. Executive Summary 2. Introduction 3. Ownership Structure 4. Experience 5. Alliances 6. Financial Capabilities 7. Service Area 8. Industry Overview 9. Business Strategy 10. Human Resources Strategy 11. Client Service and Support 12. Supplier Management 13. Conditions of License 14. Conclusion Appendix 1—List of Acronyms Appendix 2—Audited Financial Statements—1996 to 1998 2500 MHz MCS Spectrum License Application for Saskatchewan 1. Executive Summary SaskTel is applying for the 2500 MHz Multipoint Communications Systems (MCS) spectrum license in Saskatchewan. SaskTel intends to provide Saskatchewan residents with high quality, competitively priced data and voice services, and support the learning needs of Saskatchewan. SaskTel will be able to integrate the MCS technology with its existing infrastructure, which will result in SaskTel making effective use of the MCS technology. To meet the objective of providing service to as many households, learning institutions and other users as possible, SaskTel’s proposed MCS network will cover most of the inhabited areas of Saskatchewan, allowing delivery to over 95 per cent of the province’s population. The network would be implemented over a three year period. SaskTel installs, operates and maintains extensive wireline and wireless networks providing voice and data telecommunications services across the province of Saskatchewan. SaskTel has a very large pool of technical resources and trained manpower to install and maintain these networks. SaskTel’s expertise lies in the areas of network development, planning, engineering, and installation and operations. SaskTel has the financial resources to implement and manage services using the MCS spectrum. SaskTel expects that capital expenditures required for the introduction of MCS services will be funded primarily within the existing capital budget and forecasted MCS subscriber revenues. If required, additional funds will be borrowed from the Province of Saskatchewan. In implementing services using the MCS spectrum, SaskTel will grow its business, reduce costs, remain competitive and act in a socially responsible manner. SaskTel resources will be used as much as possible for all MCS network installation and maintenance work. Procedures are in place for hiring external contractors where required. 2500 MHz MCS Spectrum License Application for Saskatchewan 1 1. Executive Summary (continued) SaskTel already has experience with two-way MCS technology. Since acquiring a developmental license in 1997, SaskTel has been working with WaveCom Electronics of Saskatoon. An ongoing field trial has allowed SaskTel to gain valuable experience and knowledge. SaskTel will use existing towers, buildings and fiber facilities in order to reduce the overall network cost. SaskTel will begin implementing service the most populated serving areas. The learning institutions, along with most of the population, are in and around these more densely populated areas. As a result, installing the MCS network in these areas first will allow the greatest number of households and schools to receive high speed Internet service as soon as possible. SaskTel has been serving the people of Saskatchewan for ninety-one years and has consistently demonstrated its commitment to the rural and remote residents of the province. Implementing services throughout Saskatchewan using the MCS spectrum will be of great value to rural residents. SaskTel will demonstrate it has the vision, experience, skills and financial resources to maximize the use of MCS technology. Awarding the 2500 MHz MCS spectrum license to SaskTel will benefit Industry Canada’s goal of Connecting Canadians, Saskatchewan residents and the Saskatchewan education community. 2500 MHz MCS Spectrum License Application for Saskatchewan 2 2. Introduction 2.1 Goals and Principles SaskTel is the leading full service communications company in Saskatchewan, providing voice, data, Internet, text and messaging services over a fiber optic- based, 100 per cent digital network, as well as cellular, paging, wireless data and province-wide trunked mobile radio services through its SaskTel Mobility division. SaskTel is applying for the 2500 MHz MCS spectrum license in Saskatchewan. SaskTel’s goals are to provide Saskatchewan residents living in urban and rural areas with high quality, competitively priced data and voice services, and to support the learning needs of Saskatchewan residents. One of SaskTel’s guiding principles is that rural and remote residents should have access to quality, advanced services at rates reasonably comparable to urban residents. This principle aligns with the direction set by the federal government in the following statement: The Liberal government believes that rural Canada needs a strong information technology infrastructure. People living in rural Canada should have access to the same enabling tools and information resources as their urban counterparts.1 In relation to the Information Highway, the Government of Canada stated that, “all Canadians must have affordable access to the Information Highway, no matter where they live.” 2 1 Liberal Party of Canada, Securing Our Future Together: Preparing Canada for the 21st Century, 1997, p. 45. 2 Government of Canada. Building the Information Society: Moving Canada into the 21st Century. (Industry Canada: Distribution Services, 1996), p. 2. 2500 MHz MCS Spectrum License Application for Saskatchewan 3 2. Introduction (continued) 2.1 Goals and Principles (continued) Saskatchewan is one of the most rural of all Canadian provinces, with 28 per cent of its residents residing on farms and in small towns and villages of less than 1,000 residents, and 58 per cent of its residents living in communities of fewer than 100,000 people. The province’s population, just under one million, is dispersed widely over a geographic area of 652,000 square kilometres. This dispersal has created a telecommunications market where there are fewer than four households per kilometre of telecommunications infrastructure.3 SaskTel agrees with and has followed the principles and direction of the provincial and federal governments, and will continue to do so into the future. Although SaskTel has enabled access to the Information Highway for rural residents, those residents do not have access to the high bandwidth services that their urban counterparts do. Obtaining the MCS spectrum in Saskatchewan will allow SaskTel to provide Saskatchewan residents in rural regions with access to services that are comparable to those in urban areas. 2.2 Benefits of a Regional License SaskTel believes that awarding the MCS spectrum in Saskatchewan to an entity pursuing the spectrum nationally will not result in a focused approach to the market. If a licensee were successful in many territories, Saskatchewan would be considered a secondary market where deployment would be given a lower priority than deployment in more populated territories. Deployment of systems in Saskatchewan should happen as quickly as in other regions of Canada. SaskTel expressed a similar concern during the consideration for awarding the Local Multipoint Communications Systems (LMCS) spectrum. SaskTel was concerned that awarding the spectrum to a national entity would not result in a focused approach to the Canadian market and, unfortunately, this has proven true. The nationally awarded LMCS spectrum has been utilized in only a small number of areas, none of which are in Saskatchewan. As a result, Saskatchewan has not benefited. 3 Statistics Canada, 1996 Census of Canada. 2500 MHz MCS Spectrum License Application for Saskatchewan 4 2. Introduction (continued) 2.2 Benefits of a Regional License (continued) SaskTel also believes that awarding the spectrum to an entity pursuing it nationally will not provide for a broad array of services specific to the regional market needs across Canada. In addition, the high cost of deploying MCS technology nationally will severely challenge any single Canadian entity, regardless of financial strength. An organization pursuing a national network will likely use Saskatchewan as a backbone connection only and offer services to only the larger centres of Regina and Saskatoon. The spectrum would remain underutilized in other areas of Saskatchewan. In addition, profits generated would leave the province. SaskTel will serve Saskatchewan as its market, which will serve the public interest much better in terms of both the speed and scope of deployment. In addition, SaskTel will be able to integrate the MCS technology with its existing infrastructure, which will result in SaskTel making more effective use of the MCS technology than other organizations. This application will demonstrate that SaskTel has the experience, skills, resources and plan to develop a wide range of services in the MCS spectrum. 2500 MHz MCS Spectrum License Application for Saskatchewan 5 3. Ownership Structure 3.1 Shareholders Saskatchewan Telecommunications (SaskTel) is 100 per cent owned by Saskatchewan Telecommunications Holding Company, which is 100 per cent owned by the Crown Investments Corporation (CIC). The CIC is 100 per cent owned by the Province of Saskatchewan. 3.2 Board of Directors Tom Kehoe, Chair—Tom Kehoe held several executive positions with the Spar Group Inc. between 1985 to 1993. In 1991, he assumed the position of President, Canadian Operations for Spar Group. In 1994, Spar Group was sold to the National Manufacturing Company of Stirling, Illinois, and Mr. Kehoe became the Executive Vice