Shaw betting on revival of cable television
Shaw Communications Inc. expects to finally grow its traditional video cable subscriber base next quarter after years of losing ground to cord cutting and its telco competitors, executives said Wednesday.
The Calgary-based communications giant posted its best quarterly performance in five years when it comes to cable subscriber count, surprising analysts by losing only 5,000 cable customers in the three months ending Feb. 28, down from 42,000 in the same period last year and Bay Street’s expectation of 30,000 losses.
Shaw credited its high-speed Internet offering and its new television product BlueSky TV, which runs on Comcast’s platform and was launched across Shaw’s entire western footprint last week, for quelling declines due to attractive bundling that helped retain customers.
President Jay Mehr told analysts he will be “disappointed” if Shaw doesn’t have positive video subscriber numbers in the next quarter.
“To be clear, winning looks like positive video subs on cable,” he said on a conference call with analysts.
Whether Shaw posts positive subscriber gains for every quarter going forward will depend on what its main competitor, Telus Corp., offers in a “very intense competitive environment,” Mehr said. But for now, Shaw said an equal mix of new and existing subscribers are adopting its high-speed Internet and TV package.
“People are paying more to get more and enjoying a terrific service, and we’re just going to ride that wave,” Mehr said.
Shaw’s financial results were largely in line with analysts’ expectations, with revenue and earnings before interest, tax, depreciation and amortization increasing 13 per cent and 7.6 per cent respectively, largely due to the wireless division.
Without including Freedom Mobile, which wasn’t on the books at this time last year, Shaw’s revenue and adjusted income rose by 1.1 per cent and 1.8 per cent respectively from this period last year.
Shaw also posted decent wireless results this quarter, with 33,000 customer additions slightly beating expectations even though average revenue per user dropped due to steeper promotions.
Its wireless division is in a “complicated” situation as it transitions its network to LTE from 3G, Mehr said, adding that it’s tough for consumers to bring their own devices since most aren’t yet compatible with the network. Executives expect volatility in the division until 2018 as competitors act on their network advantages.