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Shaw maintaining wireless status quo is no surprise

Barclays analyst expected Freedom Mobile to be more competitive against the Big Three.

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Shaw Wireless:

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Hey, would you look at that – Shaw isn’t being very competitive with its new wireless service. Who could have seen that coming?

Just about anybody paying attention, actually. (This is becoming a familiar theme this week.)

Barclays’ sell-side financial analyst Phillip Huang is apparently shocked Shaw isn’t offering bigger discounts on wireless service as it competes against the Big Three of Bell, Rogers and Telus. Shaw acquired Wind in late 2015 and recently renamed it Freedom Mobile.

“We are somewhat surprised that Freedom has not turned more aggressive in driving subscriber growth given its inherent advantage with pricing and market share,” he wrote in a research note, the Financial Post reports.

The company will end up posting “lacklustre” new customer additions this year compared to last as a result, Huang says.

Anyone who expected Shaw to continue the same big discounting Wind had become known for during its brief existence simply wasn’t paying attention.

At the time of the acquisition, I noted that Shaw had a reputation for “rational pricing” and for co-operating with Rogers on a number of deals and arrangements. The Calgary-based company simply couldn’t be counted on to rock the boat.

Chief executive Brad Shaw also said at the time that he saw his company’s pricing as “somewhat discounted, but probably closer to the incumbents as we go forward, which allows us to increase ARPU [average revenue per user].”

The internet advocates at Open Media didn’t welcome the takeover news either: “Given Shaw’s poor track record as one of Canada’s most expensive internet providers, we’re not holding our breath for lower wireless prices.”

The Public Interest Advocacy Centre said much the same: “Losing Wind to Shaw means consumers will pay more for wireless, not less, because Shaw will join the other three big players in trying to sell their broadcasting content over wireless in increasingly expensive packages”

So, yeah. Shaw holding the line on Canada’s notoriously expensive wireless service – so far and into the future – should be a surprise to no one.

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2 Comments on Shaw maintaining wireless status quo is no surprise

  1. We, ahem, commented (quite clearly) too Peter:

    “Losing WIND to Shaw means consumers will pay more for wireless, not less, because Shaw will join the other three big players in trying to sell their broadcasting content over wireless in increasingly expensive packages.,” said John Lawford, Executive Director and General Counsel for PIAC. “Consumers will lose the chance for lower prices from all wireless carriers when the pricing pressure from this potential maverick is gone.”

    https://www.piac.ca/our-specialities/shaw-wind-deal-means-more-of-the-same-high-prices-for-wireless/

    • Peter Nowak // April 5, 2017 at 9:55 am // Reply

      Apologies John. The memory ain’t what it used to be! I’ve added your comment into the post above.

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