Shaw's wireless biz waxes as wireline wanes

It was a tale of two technologies again for Shaw Communications in its fiscal Q2. The Canadian operator's wireless business continued to add subs to its base while its wireline business, including home broadband, shrunk again.

Shaw, which is set to merge with fellow Canadian cable and mobile service provider Rogers Communications, lost another 26,497 cable video subs in the period, lowering its total to 1.32 million. It also also lost 13,508 satellite TV subs.

Unlike many of its US cable peers, Shaw's residential broadband business is not getting a huge lift during a persistent pandemic. Shaw lost 5,425 Internet customers in fiscal Q2, compared to a gain of 6,072 a year earlier, giving it a total of 1.88 million. With this quarter included, Shaw has lost more than 40,000 broadband subs over the past four quarters.

Shaw, like Rogers, has a close technology and services relationship with Comcast, syndicating its X1 platform for its latest pay-TV service and utilizing Comcast's product designs for cable broadband gateways.

Shaw did not host an earnings call for Q2, but execs have previously attributed its broadband troubles to a general slowdown caused by the pandemic, paired with tough competition from Telus.

On the wireless side, Shaw added 82,297 subscribers in the period, pushing its total past 2 million. Q2's tally included the addition of 75,069 postpaid subs (for a total of 1.64 million) and 7,228 prepaid customers (for a total of 360,300).

That uptick is partly due to success stemming from last year's launch of Shaw Mobile. That offering features unlimited data and by-the-gig plans that carry a better price when bundled with Shaw's broadband service rather than when purchased as a standalone.

Shaw noted that the shift to Shaw Mobile lowers revenues and ARPU, but has resulted in higher household profitability from bundled customers who add Internet service or upgrade their speed tiers.

Consolidated Q2 revenues rose 1.8%, to $1.39 billion, while total net income climbed 29.9%, to $217 million.

"While the financial impacts from COVID-19 in the second quarter of fiscal 2021 were not material, the situation is still uncertain in terms of its magnitude, outcome, duration, resurgence and/or subsequent waves," the company said.

Deal static

Meanwhile, Shaw and Rogers are getting some pushback about their proposed merger, particularly because such a combo would remove a wireless competitor from the market.

The deal creates "very serious issues and very important issues when it comes to maintaining that level of competition," Innovation Minister Francois-Philippe Champagne said late last month, according to Bloomberg. "Obviously that proposed transaction will be reviewed with these lenses to make sure that Canadians will have access to affordable and competitive prices when it comes to telecoms, and that we also foster innovation in that sector."

Related posts:

• Rogers, Shaw announce $20.8B merger aimed at 5G dominance in Canada
• 'Shaw Mobile' banks on network convergence
• Podcast – The Divide: Ribbon's Bruce McClelland on economics and politics of rural broadband

— Jeff Baumgartner, Senior Editor, Light Reading