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Shaw Buys Wind Mobile, Could Have Hard Road Ahead

February 23, 2016 - Written By Daniel Fuller

Telecommunications firm Shaw Communications is a fairly big name in Canada. They offer home internet, phone and television, but once upon a time, they were a player of sorts in the mobile game. Though they never ended up becoming an available option for wireless consumers in Canada, they had made plans, bought spectrum and laid the groundwork. Seeing greener pastures elsewhere and higher projected costs to jump into the wireless game without being lost in the sea of competition, they pulled out of mobile entirely back in 2011, a move that analysts did not see as wise. According to recent transactions and announcements, however, it looks like they have plans to rectify that and get into the consumer wireless space.

Last week, Shaw sold their media and entertainment arm to local element Corus Entertainment, Inc. Though controlled by the Shaw family, Corus has been in a joint business with competitor Rogers as a content provider and maintainer for the Shomi streaming service. According to Brad Shaw, this move is meant to diversify their holdings and guarantee them a place in the growing internet media space. Meanwhile, Shaw’s recent purchase of smaller carrier Wind Mobile, who only services Ontario, Alberta and British Columbia, will be balanced out by the sale. Since Wind has been unable to build out an LTE network to compete with other carriers due to their meager financial standings, it will fall to Shaw to buy up the necessary spectrum and do the expensive legwork to get the network built out and in a competitive state.

A popular strategy for some companies, such as Rogers, is to bundle home and mobile services. Consumers generally respond well to well-priced, feature-rich bundles that allow them to enjoy all their services and only have one bill to pay and one customer service team to interact with. This appears to be the strategy that Shaw will be going with. This will require strong offerings in the home space, which they already have, and in wireless. To that end, Shaw has roughly $189 million in wireless spectrum up their sleeve, in addition to Wind’s significant holdings. Although a 2013 deal with Rogers to allow them to buy Shaw’s unused spectrum may make network buildout a bit difficult, Wind’s existing spectrum portfolio may give them enough to work with to build out a network that can compete with Canada’s Big Three, Rogers, Bell and Telus.