SaskTel’s buy of RSL COM moves telco into BC, Alberta, Ontario and Quebec

SaskTel has taken the first step to compete in other parts of Canada with its $17-million purchase of RSL COM Canada – a move that should make RSL a more formidable competitor, and at the same time, help the provincial telco diversify its revenue base. Announced this summer, the deal follows months of negotiations between the two companies, and assurances by the government-owned telco that it will retain RSL’s current staff and operate its new subsidiary at arm’s length. " will be active at the board level they will provide support at the management level if we need it. But they’re going to run it as an investment," RSL COM Canada president David Alsop told Network Letter. "We’re not going to be a division or a department." For its part, SaskTel doesn’t expect to make many changes in the operations. Most of the services will continue to be branded with the RSL COM name. "The core business will stay the same," Daryl Silzer, SaskTel’s GM strategic business development explains. "It’s long distance, ISP services, virtual wholesale ISP services, resold Centrex and then we’ll bring some of our ecommerce and some of our data services from our Quantumlynx business unit. There’ll be some products that SaskTel will actually take from RSL." Silzer singles out RSL COM’s prepaid and postpaid cards as being a good investment. "They have a very good cost effective rate."It was slightly more than a year ago when RSL COM’s parent company announced it was putting its Canadian assets on the block (NL, July 31/00). Alsop and his colleagues spent months sifting through various offers. "At one point we were probably working with maybe eight or 10 different parties. But for various reasons a number of them fell away," he recounts. When it is suggested that some of those companies fell away quite literally, the president laughs and replies, "Yes, that’s true." When the bidding for RSL COM was first announced, some speculated that a smaller telco would buy it. Silzer says SaskTel has been looking for new properties for the last three years in an effort to boost revenues outside of Saskatchewan, as its core revenues inside the province shrink because of competition. The telco will also be able to reduce termination costs on the LD side of its business by using RSL COM Canada’s grid in BC, Alberta, Ontario and Quebec. Executives in Regina and Vancouver say they have no plans to expand RSL COM beyond its current geographic footprint. "We have no intentions of going beyond where we already are," Alsop reports. "We’ve got enough on our plate to fill up the network and attract additional customers in those four provinces." Silzer agrees, saying the network is substantial, particularly in British Columbia. He adds that RSL COM’s Canadian customers will benefit from SaskTel’s vast product offerings. "So there’ll be SaskTel products and services that can be made available to RSL and they can market them through their network and dealer channels and their direct sales people."RSL COM Canada currently has 241 employees. Alsop expects that number to remain static in the short term. But growth in the next few years should lead to new job creation.RSL COM has concentrated on the business sector, especially in its deployment of DSL services. Its residential service is limited to those customers it inherited in its purchase of Westel Telecommunications. SaskTel doubts it will change the company into a CLEC."The RSL management team has taken a look at building around that some time ago and at the time the business case didn’t prove out good enough to go forward," Silzer states. "But if RSL’s management brought out another business plan around that, we’d have a look at it."

SaskTel’s buy of RSL COM moves telco into BC, Alberta, Ontario and Quebec

News | September 11, 2001

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