Home / Financial News / Why Shaw Communications Inc will pay the price to stake its claim as a wireless player

Why Shaw Communications Inc will pay the price to stake its claim as a wireless player

Shaw Communications CEO Brad Shaw. "Brad's instruction to everyone was that he wanted to build a Shaw that's more relevant 10 years from now than it is today and a Shaw that is more relevant in 20 years than it is in 10 years," chief operating officer Jay Mehr said in an interview.

Last week, the future of Shaw Communications Inc. was a lot clearer.

It sold Shaw Media Inc. to related company Corus Entertainment Inc. and will make use of the proceeds to fund its recent acquisition of upstart carrier Wind Mobile Corp.

Should both transactions pass muster by mid-year, Shaw would realize a wireless ambition that’s at least eight years within the making, one that has seen the organization create a $189.5 million purchase of wireless spectrum, begin constructing infrastructure, simply to suddenly stop building, fearing the project’s $2-billion price tag would cripple the organization. Shaw sold Rogers the choice to get its unused spectrum licences in January, 2013.

Even because it was exiting wireless, the organization could see how smitten their customers were becoming with being connected. “The Internet, sent to a range of wireless and wired devices, is changing everything,” chief executive Brad Shaw told investors 2 yrs ago.

After years of mixed signals, Shaw will finally join the wireless fray but will pay a cost because of its tardiness.

“Brad’s instruction to everybody was that he desired to build a Shaw that’s more relevant 10 years from now than it is today and a Shaw that’s more relevant in Two decades than it is in 10 years,” chief operating officer Jay Mehr said within an interview.

But until then, competitors Rogers Communications Inc., Telus Corp. and BCE Inc. have developed a massive head start. The Big Three have taken benefit of the burst in cellular data usage, using expansive retail networks to market pricey smartphones to a growing quantity of customers, bundling other services – such as television and Internet – in to the package.

Wind hasn’t been in a financial position to invest heavily to strengthen its network, lowering the quality of its offering. Wind doesn’t operate an LTE network because of its 940,000 subscribers in Ontario, Alberta and B.C., which handicaps the carrier from increasing its rates. In its third quarter, the discount cellphone carrier generated average monthly revenues per user of $35.81.

It will definitely cost the company $250 million through 2017 to strengthen its network.

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