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Cable/Video

Shaw Mobile drives wireless gains, but broadband subs slide again

A new, mobile service bundle for Shaw Communications customers goosed the cable provider's wireless subscriber numbers in Q1, but the company still saw a dip in overall broadband subs.

Introduced last summer in Alberta and British Columbia, Shaw Mobile features unlimited data and by-the-gig plans that fetch a better price when bundled with broadband than when purchased separately.

"We're seeing very, very positive metrics ... on Shaw Mobile's overall performance," Paul McAleese, Shaw's president, said on Wednesday's earnings call. "From a mix standpoint, most of these customers are ports from other carriers."

Shaw, a provider focused on Western Canada, said Shaw Mobile led to record wireless net adds of about 101,000 in the quarter, along with a 31% year-on-year increase in postpaid net adds of 87,300.

Residential broadband losses mount

However, Shaw Mobile's results were not enough to reverse a continuing slide in broadband subscribers. The company lost 15,100 residential wireline broadband subs, ending the period with 1.88 million subs. Shaw lost 14,500 subs in that category in the previous quarter, and it shed 5,100 in the quarter before that.

Shaw execs attributed that to a general slowness of the market during the pandemic alongside fierce competition from Telus.

"The 15,000 subs that we lost last quarter didn't abandon the Internet; they likely went across the street to Telus," McAleese said, noting that some of Telus' recent gains have relied on discounted Internet pricing on their standard rate card and in wireless service bundles.

Among bright spots, Shaw is seeing a rise in broadband customers taking the operator's high-end 1 Gbit/s and 1.5 Gbit/s broadband service tiers. McAleese estimated that more than 20% of customers are onboarding and activating on one of those two plans.

"We've made it clear in the past that our focus is going higher value household relationships, including broadband complemented by wireless through Shaw Mobile bundle," he added. "Let me put a bow around this – we have rapidly become the preferred provider for higher value internet customers in western Canada."

Shaw doesn't expect to see a big growth spurt this year either, as it continues to lean on the bundle and avoid chasing the market with steep discounts and promotions.

"It's a slow-moving target," McAleese said. "It's difficult to get customers to change their internet provider during the pandemic with everybody home doing the things they're doing. Our churn is down considerably year-on-year, our gross is down considerably year-on-year, and our economic return is up considerably year-on-year. So, for now, that's a trade that we’re comfortable with."

Like most other cable providers, Shaw's video sub base took another hit in fiscal Q1, losing 34,437 residential video subs and lowering that total to 1.35 million. Shaw's cable pay-TV platform is powered by an X1 syndication agreement with Comcast.

Shaw's satellite TV business shed 15,068 subs, ending the period with 1.88 million.

Elsewhere, Shaw also announced the election of cable industry vet Steve White to its board, effective January 13. White most recently was president of Comcast's West division, and he is currently serving as president and special counsel to Comcast Cable CEO Dave Watson.

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— Jeff Baumgartner, Senior Editor, Light Reading

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