Following the suspension of its wireless initiatives in April and an extensive internal review, the Canadian operator said Thursday that the "more prudent approach" is to go with Wi-Fi, a move that will let it "achieve our objectives without risking well over $1 billion in capital expenditures on a traditional wireless network build."
Taking a page from Cablevision Systems Corp. (NYSE: CVC), which has built an extensive Wi-Fi network in lieu of a cellular strategy, the Calgary-based MSO plans to use its coming wireless network in Western Canada to enhance the value of its wireline cable modem services and use it to reduce subscriber churn. It also plans to pitch wireline and Wi-Fi service packages to small- and mid-sized businesses.
Shaw's also hopeful it can create incremental revenue by selling offload services to Canadian cellular service operators such as Rogers Communications Inc. (Toronto: RCI). "Carriers will want this," MSO CEO Brad Shaw predicted, noting that the company now views wireless primarily as a "defensive investment."
And Shaw's apparently been keeping tabs on the hard lesson learned by Cox Communications Inc. , which recently abandoned its cell network buildout, opting instead to sell a wireless service that piggybacks on Sprint Corp. (NYSE: S)'s network. (See Cox May Tear Down Wireless Network.)
Shaw, which serves 3.4 million subs, did not say how much capital will be required for the Wi-Fi build, but did note that it expects to deploy it in "key markets" by the spring of 2012.
Why this matters
For Shaw, the decision will likely soothe investors who were fearful that the MSO would pull the trigger on an expensive cellular network buildout. Shaw's likewise convinced that its Wi-Fi strategy will still let it achieve wireless goals involving voice as well as mobile TV Everywhere services.
But Shaw did leave itself some wiggle room for a future cellular buildout that would put it up against Canada's mobile incumbents Rogers, Bell Mobility Inc. and Telus Corp. (NYSE: TU; Toronto: T).
Shaw execs said the company has no current plans to sell its Advanced Wireless Services (AWS) holdings, but did note that it may bid in Canada's upcoming 700MHz spectrum auction.
Shaw's decision is also a boon to Cisco Systems Inc. (Nasdaq: CSCO), which has been tapped as Shaw's primary supplier of Wi-Fi technology, including gear that can be strung on and powered by the MSO's hybrid fiber/coax (HFC) plant.
Bone up on cable's wireless activities.
- Cablevision Gets Closer to Sprint
- Cox: We're Not Selling Our Spectrum
- Does Cable Have a Wireless Plan B?
- Cox Wireless Is Go for Launch
- Cablevision Also Kicking LightSquared's Tires?
- Is AT&T Messing Up Cablevision's Mobile Plans?
- Cox May Tear Down Wireless Network
- Cablevision Trademarks Mobile, RS-DVR Brands
- Cablevision Cranks Up Wi-Fi Speed
— Jeff Baumgartner, Site Editor, Light Reading Cable