Shaw Communications Inc. isnt content with Freedom Mobiles million subscribers it wants millions and millions and millions. <\/p>\n
President Jay Mehr revealed just how big the cable companys ambitions are in the wireless market at the TD Securities telecom and media forum in Toronto on Wednesday, stating Shaw plans to take the playbook from Quebecor Inc.s regional carrier Videotron Inc., which has a goal of grabbing a quarter of wireless subscribers in its operating territory. <\/p>\n
We are absolutely as bold in our aspirations, Mehr said. <\/p>\n
Mehrs comments come the day after Shaw announced two major deals to bolster its wireless business. It sold ViaWest, its data centre operations, for proceeds of $900 million and inked a $430 million deal with Quebecor Inc. to buy critical low-band spectrum licences in Ontario, Alberta and British Columbia radio frequencies needed to improve its network. It also announced plans to invest an additional $350 million to deploy the new spectrum in existing markets. <\/p>\n
What you are hopefully seeing now is that our aspirations go well beyond the regional Wind business plan, Mehr said, referring to Wind Mobile, which Shaw bought in 2016 and renamed Freedom Mobile. <\/p>\n
The future of our business is to be a powerful player in wireless with millions and millions and millions of subscribers. <\/p>\n
As it stands, Freedom has about one million of the 30 million wireless subscriptions in Canada. The telecom regulator does not break down the number of subscribers per province, but it does state that only 10 per cent of subscriptions nationwide are not with the Big Three of Rogers Communications Inc., BCE Inc. and Telus Corp. <\/p>\n
It might be a steep climb, but Mehr called wireless the single biggest opportunity for Shaw. Shaw plans to go the same route as Videotron, not T-Mobile, the fourth wireless player in the U.S. known for its aggressive promotions, Mehr said. While Shaw would consider going a bit further with deals in order to meet its goals, he added it will be nowhere near what T-Mobile has done. <\/p>\n
Quebecor chief financial officer Jean-Franois Pruneau, also speaking at the forum, said the transaction with Shaw is positive since it puts spectrum in the hands of a new entrant. <\/p>\n
Its obviously positive for the Canadian consumers because they will most likely benefit from lower prices in the future, Pruneau said. Wireless prices are lower and data caps are higher in provinces where there is a strong fourth player, such as Quebec and Saskatchewan. <\/p>\n
Plus, Quebecor benefits from stronger competition against the Big Three, Pruneau said. <\/p>\n
Shaws competitors are the same as our competitors. If we strengthen Shaw by giving them access to our spectrum, theres an indirect benefit for us, he said, later confirming that Videotrons objective remains to grab 25 per cent of the market. <\/p>\n
Both companies stock prices rose on the news of the spectrum deal. Shaw increased nearly six per cent and Quebecor more than three per cent by mid-afternoon Wednesday. <\/p>\n
Analysts also liked the transaction. Desjardins analyst Maher Yaghi increased Shaws price target to $30.50 from $30 and Quebecors to $48 from $46.50. RBC analyst Drew McReynolds raised Shaws price target to $31 from $30. <\/p>\n
Barclays analyst Phillip Huang called the deal a win-win for the companies, but would not assume Shaw will be able to transform Freedom into Videotron 2.0 in the next fiscal year, he wrote in a note to clients. . <\/p>\n
However, we believe the deal lifted a significant barrier (i.e. lack of spectrum) to Shaws wireless growth ambitions, and undoubtedly strengthened its long-term competitive positioning, Huang wrote. <\/p>\n
Financial Post <\/p>\n
ejackson@nationalpost.com<\/a> <\/p>\n twitter.com\/theemilyjackson <\/p>\n <\/p>\n Go here to see the original: <\/p>\n 'Millions and millions and millions of subscribers': Shaw's Freedom Mobile wants to grab quarter of wireless market - Financial Post<\/a><\/p>\n","protected":false},"excerpt":{"rendered":" Shaw Communications Inc. isnt content with Freedom Mobiles million subscribers it wants millions and millions and millions Continue reading