2011: A Shaw Odyssey

by Jordan Richardson on April 12, 2010

Perhaps it isn’t as transfixing as extraterrestrial life or as mesmerizing as HAL 9000, but Shaw’s announcement on Friday that they were planning on heading into the wireless frontier in late 2011 certainly is worth mentioning.

For one thing, the Calgary-based cable, internet and digital phone provider said that it would invest $100 million on its wireless rollout. This is on top of the $190 million Shaw spent on licenses two years ago and should finally help develop the resolution made by Ottawa to let new players into the old markets.

The industry has seen some changes since Shaw snapped up those licenses, though, and new competition has been working to edge its way into terrain long dominated by Rogers, Telus and Bell. Globalive’s WIND, Mobilicity, Public Mobile, and Vidéotron are all interested in slicing up the pie, too, so Shaw could have some competition it didn’t anticipate.

With Shaw waiting so long to finally put a date on their wireless endeavour, some analysts, like Genuity Capital Markets analyst Dvai Ghose, think the company might have missed the boat. “They certainly lost early-mover advantage by definition,” said Ghose.

Shaw’s Friday announcement came with reporting of its second quarter profits. The company noted a dip of 11% in profits in the second quarter despite higher pricing and customer growth that produced increases in overall revenue. Debt retirement costs were said to be partly to blame for lower earnings.

Regardless, Shaw remains a major player in Western Canada and could give the Big Three a run for their money. With the market finally receiving some details, albeit rather indistinct ones, it could be time for a slim swivel in Shaw’s wireless fortunes. The news is most likely not enough to enhance investor confidence all that much, but at least it puts a date on a plan that many never thought would come.

From a consumer perspective, almost any competition in Canada’s telecom industry is a good thing.

With Bell, Telus and Rogers sharing 95% of the business, Shaw’s muscle could be as good a bet as any to crack some of that inane carbuncle apart. If anything, it gives the Big Three an established brand name to contend with in Western Canada.

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Written by: Jordan Richardson. www.digitcom.ca >. Follow TheTelecomBlog.com > by: RSS >, Twitter >, Identi.ca >, or Friendfeed >

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