Freedom Mobile takes on telecom’s Big Three with 10 GB data package for $50
Shaw Communications Inc.’s Freedom Mobile is spicing up Canada’s wireless market with new data plans far cheaper than those offered by its Big Three competitors.
On Thursday, Shaw will launch what it describes as an “in-yourface” national marketing campaign for “Big Gig” branded plans on Freedom’s upgraded LTE network.
The most notable plan provides 10 gigabytes of data and unlimited nationwide calling for $50 per month (this does not include a device subsidy) — less than half the price of comparable bring-yourown-device plans from rivals’ main and second-tier brands, which all charge at least $115 for 10 GB.
“Offering our customers access to this much data on our new LTE network resets the marketplace and redefines what Canadians should be paying for data,” Freedom’s chief operating officer Paul McAleese said in a statement.
“Until now, the approach to wireless data pricing has been deliberately punitive, and out of line with customer usage.”
This marks Shaw’s first major move to grab customers since it entered the wireless market in spring 2016 with its $1.6-billion purchase of Freedom (formerly called Wind Mobile). It has since invested hundreds of millions of dollars to buy spectrum and upgrade its network.
Executives haven’t hid Shaw’s ambitions to eventually grab a quarter of the wireless market share, but they haven’t made any aggressive moves given the gap in network quality between Freedom and wireless giants Rogers Communications Inc., BCE Inc. and Telus Corp.
The Big Three boast larger networks (Bell and Telus share a network) that allow subscribers to roam free nationwide, whereas Freedom charges customers for roaming outside its coverage zone in major cities in Ontario, B.C. and Alberta. PCMag’s latest comparison of wireless carriers’ speed and reliability found Freedom lagged.
This isn’t the first time Shaw lowered wireless prices to lure customers seeking affordability perhaps at the expense of quality. In August, Freedom offered 10 GB plans for $40 per month, but only for one day and only to customers switching from providers owned by Telus, its top competitor in Western Canada.
Since then, Freedom confirmed it will sell the latest iPhones, the first Apple Inc. products that will work on its network. Investors have long viewed its iPhone-less phone lineup as a competitive disadvantage.
Still, analysts don’t expect a quick shake up to the wireless industry where the Big Three each have roughly 30 per cent of the national market share.
“We expect iPhone’s impact on Shaw’s wireless growth to be quite gradual, since only the expensive iPhone 8/8+ and X are compatible with Freedom’s LTE network,” Barclays analyst Phillip Huang wrote in a note Tuesday.
Barclays doesn’t expect Shaw and Rogers to sign a networksharing agreement in the foreseeable future, Huang writes, so there could be near-term downside risk as Shaw spends heavily to build its own network.