SHAW’S RISE TO MAJOR WIRELESS PLAYER STATUS MAKES IT THE BIG FOUR IN TELCO.
Shaw Communications Inc. may only have a fraction of the national wireless market share compared to its Big Three competitors, but Barclays analyst Phillip Huang predicts it’s “unquestionable” that the Calgarybased company will eventually gain enough subscribers and become one of the Big Four.
“The pieces are falling into place” for Shaw to grab about one- quarter of the market share in Western Canada and Ontario given i ts recent spectrum purchase, capital position and government support, Huang wrote in a report to clients Monday.
“Shaw’s rise to become one of the Big Four in Western Canada and Ontario is a matter of ‘ when,’ not ‘ if,’ ” Huang wrote. Rogers Communications Inc., BCE Inc. and Telus Corp., each have about 30 per cent of the national market share.
He expects Shaw, which currently operates its wirel ess network under t he brand Freedom Mobile, will start competing more aggressively in the next 12 months once it deploys the 700 MHz and 2500 MHz radio frequency blocks it purchased this spring for $ 430 million. It plans to spend an extra $ 350 million to deploy the spectrum.
Shaw executives have confirmed their goal is to hit 25 per cent market share, in line with the aspirations of Quebecor Inc.’s Videotron i n Quebec. But Freedom Mobile has only had “lacklustre” performance thus far when it comes to subscriber growth and average revenue per user, Huang noted.
“It seems to reflect management’s deliberate efforts to not appear disruptive to the incumbents before Shaw is ready,” he wrote.
As it stands, Freedom’s network overall has lower quality and speed than that of Rogers, Bell and Telus, but Huang believes the improved network will increase Freedom’s appeal beyond lower- end customers, especially since it is capable of supporting the new iPhones for the first time.
Another hint that Shaw might make moves is that it trademarked the names Shaw Mobile, Shaw Wireless and Shaw Mobility on Sept. 14, according to the Canadian Trademarks Database.
Huang was not surprised to see this and expects management to start selling iPhones within the next six months. Still, Huang expects a “potentially bumpy ascension” for Shaw.