CALGARY – Shaw Communications credited its Freedom Mobile for gains in profits and revenues in its first quarter ended November 30, 2018.
The Calgary-based company said Monday that it added approximately 66,000 net Wireless wireless revenue generating units (RGUs) in Q1 2019, consisting of over 86,000 postpaid additions and 20,000 prepaid losses, up from the 34,000 net RGUs posted in the first quarter of fiscal 2018.
CEO Brad Shaw credited the influx in subscribers to promotions such as the Big Binge Bonus which he said “provides a strong value proposition to Canadians who increasingly want and use more wireless data.”
“Our strategy to invest and focus on growing our Wireless postpaid market share has delivered another quarter of strong results, adding over 86,000 postpaid customers while improving Wireless postpaid churn from 1.64% to 1.28% over the last year due to significant and ongoing enhancements to our network and customer experience,” he continued. “Through these investments, we are attracting and retaining customers with higher lifetime value.”
The company’s deployment of its 700 MHz spectrum is now approximately 25% complete, including initial deployment in all its major markets, while voice-over-LTE (VoLTE) is “substantially complete” and has been enabled on close to 35 devices on Freedom’s network representing approximately 800,000 of its total subscriber base. Freedom Mobile now has over 600 retail locations in operation after launching in 140 new retail locations with Walmart this quarter.
Consolidated Wireless revenue for the three-month period improved by 60% to $273 million over the comparable period in fiscal 2018, and Shaw attributed the growth to continued subscriber growth, the growing penetration of Big Gig data plans, and higher equipment sales.
In its Wireline segment, revenue and operating income before restructuring costs and amortization improved by 0.7% and 11.9% year-over-year, respectively. Consumer revenue remained flat at $936 million compared to the prior year as contributions from rate adjustments and growth in Internet revenue were offset by declines in Video, Satellite and Phone subscribers and revenue. Business revenue increased 5.0% year-over-year to $147 million, reflecting continued demand for its SmartSuite of business products. First quarter Wireline results also include operating costs savings of approximately $25 million related to the Voluntary Departure Program (VDP) and lower marketing costs as compared to the first quarter of fiscal 2018.
Wireline RGUs declined by approximately 52,800 in the quarter compared to a loss of approximately 34,000 in the first quarter of fiscal 2018. The current quarter includes growth in Consumer Internet RGUs of approximately 5,600 whereas the mature products within the Consumer division, Video and Phone, continued to decline.
“We have taken some important steps this quarter in our Wireline segment, adding Consumer Internet subscribers, doubling the speeds of our top Internet tiers, and stabilizing revenue through our fresh approach to base management, which includes a balanced and digital focus on acquisition and retention,” added CEO Shaw. “While we are still early days in our journey towards a modern Shaw, I am encouraged by the progress we have made as we improve upon the fundamentals of our business, further supporting the delivery of our broadband strategy throughout fiscal 2019.”
Revenue from continuing operations increased by approximately 8.8% to $1.36 billion compared to the first quarter in fiscal 2018, and operating income before restructuring costs and amortization increased 13.5% year-over-year to $545 million.
Net income for the quarter jumped 68.5% to $187 from $111 million in the same period last year, driven primarily by an increase in operating income before restructuring costs and amortization.
Click here for more on Shaw’s financial results.
