Tbaytel needs to find new ways to get money, consultant says

Superior Morning5:19TbayTel - Buy or Sell

When you look at tbaytel, do you see a valuable public asset, or a potential sale? Roberta Fox is the chair and chief innovation officer of Fox Group Technology ConsultingA telecommunications consultant cautions Thunder Bay city council to hang on to Tbaytel, after the mayor said the question of keeping the asset might come up in the future.

But for now council appears to be resisting any temptation, as they start budget deliberations in just a few weeks.

Mayor Keith Hobbs said, at this time, Tbaytel is profitable, and the city should hold onto the money-making utility.

But, the competitive market could always change the company's balance sheet.

"I've always said you've always got to watch that asset because that's such an important one for the city,” he said.

“But right now, they keep delivering us that $17 million dividend and, at some point, if we see that that's not happening, then we have to seriously take a look at it."

The chief innovation officer with Fox Group Technology Consulting said council would be wise to keep Tbaytel.

"Other cities ... are looking to start to get into the game,” Roberta Fox said.

“If other towns are looking at getting into it, why should we get out of it?"

Staying 'on top of the game'

Councillor Iain Angus agreed.

"Even if we didn't get any dividends from TBaytel, we still have control. We still have all of the employees that live in this community. It would be foolish, quite foolish, to get rid of it."

Angus noted that, if the city were to sell off the company, many of the 400 employees would have their jobs transferred elsewhere.

Tbaytel pays the city $17 million annually as part of its dividend to the sole shareholder, which is the city

Tbaytel has been scrutinized recently for eliminating a $20 million capital reserve requirement. That reserve has paid additional dividends to the city in the past — something it hasn’t done in the last few years.

Hobbs said to keep Tbaytel as an asset “we have to make sure that we're on top of the game. The telecommunication industry is too competitive.”

Fox agreed that those in the industry have to look at new ways to get money.

"Between IT and telecom and datacom ... you have to do it, because long distance rates have dropped hundreds of per cent over the last [years]. You have to get new ways to get money."

In the meantime, Coun. Andrew Foulds said the city needs to hang on to Tbaytel, which “serves us with continuous revenue ... No one has made the case to me to stop that continuous source of revenue."