Freedom to at least quadruple handset offering by mid-2017: Shaw

As Shaw Communications Inc. released its first quarterly earnings report since rebranding its wireless segment to Freedom Mobile, CEO Brad Shaw said the company is looking to have a double-digit number of handsets available by mid-year, after some analysts pegged the company’s small handset roster as a potential limiting factor to its appeal. “I think when you look at the new network, one of the key things is handsets and handset availability,” Shaw said on a conference call with media Thursday. “Right now there are a couple handsets —I think we’re having one come on about every month or every six weeks, so over the next six months, it’ll be eight to 10 choices of handsets, which I think is very important for customers.” The company currently sells the LG Corp.’s LG V20 and ZTE Corp.’s ZTE Grand X4. It launched its LTE network in Toronto and Vancouver in November. The comments come after analysts speculated that a limited number of handsets compatible with its AWS-3 spectrum would be Freedom's Achilles heel in the immediate term. Shaw purchased Wind Mobile in early 2016 and rebranded the wireless carrier as Freedom Mobile in November. When asked which handsets he’s most looking forward to adding on the roster, Shaw said Apple Inc.’s iPhone and Samsung Electronics Co. Ltd.’s offerings come to mind, which are “certainly on the roadmap this coming year.” Alek Krstajic, CEO of Freedom, said on a conference call with analysts that he expects all major manufacturers to have their phone models compatible with its network, which uses the AWS-3 spectrum purchased in 2015, by early fall. “This is driven largely by U.S. carriers who are also looking for band 66-ready handsets to be able to do AWS-3 LTE,” Krstajic said. “So I would expect by the end of our fiscal year….you’ll see all the major brands with band 66 handsets in our lineup.” Ahead of its earnings release, Shaw revealed Wednesday that it had launched its IPTV platform, called BlueSky TV and running on Comcast Corp.’s X1 platform, in Calgary. It is the same platform that Rogers Communications Inc. will use for its own IPTV service. Desjardins Capital Markets analyst Maher Yaghi wrote in a Thursday note that he expects the IPTV launch to reduce subscription losses “in the next few quarters.” Shaw reported 13,000 cable subscription losses this quarter, down from 18,000 at the same time in the previous year. For the period ended Nov. 30, revenue increased 14.9 per cent to $1.3 billion this quarter compared to the equivalent period last year. While operating income was up 6.1 per cent to $539 million this quarter, the quarter brought in only $89 million in profit, compared to $218 million in the same quarter last year— a difference of 59.2 per cent. That reduction in net income was due largely to the discontinuation of online video streaming service Shomi — a joint venture with Rogers— which cost the company $107 million, as well as the sale of its media division to Corus Entertainment Inc. The improvement in revenue was driven by the acquisition of Freedom, which contributed wireless revenues of $138 million, according to a management discussion and analysis document. This past August’s rate increases in its consumer and business divisions, growth in Internet subscribers and a decrease in promotional costs over the year, partly due to the rebranding, all contributed to revenue growth, the company noted in the document. Shaw added roughly 17,000 new Internet customers this quarter, a figure that included the impact of its WideOpen Internet 150 package. When asked about the potential for bundling Freedom with Internet and TV, CEO Shaw didn’t rule it out. “That’s something down the road that we’re going to be looking at,” he said. “I think you can also look at us in the next year launching other wireless services, so it’s going to be coming, but we want to be smart in the market.” As of this quarter, consumer TV subscribers stood at 1,657,913 for cable TV, and 774,905 for satellite TV, while consumer Internet subscribers totaled 1,804,606. Total subscribers for all consumer segments, including landlines, were at 5,176,342. Average wireless revenue per unit (ARPU) stood at $36.84, down 1.5 per cent from the last quarter, which the company said was due to its focus on the launch of Freedom, its rollout of LTE and heightened competition in the market. Postpaid wireless subscribers for the quarter were 681,335 with a total wireless subscriber base of 1,052,758 — a gain of 9,470 subscribers for the quarter. That figure, however, fell well short of the consensus estimate of 33,600, Yaghi said. Pointing to that softness, Yaghi suggested the company sell its ViaWest data centre business and its stake in Corus to “invest the required resources to profit fully from the company’s entry into the wireless business.” — With reporting by Ahmad Hathout at ahathout@thewirereport.ca and editing by Anja Karadeglija at akarad@thewirereport.ca

Freedom to at least quadruple handset offering by mid-2017: Shaw

News | January 12, 2017

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Freedom to at least quadruple handset offering by mid-2017: Shaw

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