CALGARY – As reported by Cartt.ca, Shaw Communications today announced that after a months-long strategic review of the wireless business opportunity, it has decided to set aside a traditional wireless build and go Wi-Fi.
The Wi-Fi option was something discussed in a recent Scotia Captial research report which we detailed here in early August.
“We have now completed a thorough strategic review of the wireless business opportunity including the potential value of wireless in the traditional cable bundle, the rapid evolution of wireless technologies, the capital needed to build a competitive wireless network (including additional spectrum requirements), recent changes in the wireless competitive environment, and the impact that wireless would have on long-term shareholder value,” reads the official Shaw press release.
The many hundreds of millions of dollars, if not multi-billion-dollar, economics of a conventional wireless business as a new entrant was simply too daunting for the company. “New entrants lack the economies of scale and scope to compete effectively against well established incumbents with ubiquitous coverage, extensive device ecosystems, deep spectrum positions and large retail networks,” notes the Shaw release.
“Even with our established base and considerable strengths and assets, we could not justify a wireless network build at this time.”
So, Shaw will provide a managed Wi-Fi network that will allow customers to extend their Shaw services beyond the home to serve a developing world where broadband Internet access is moving increasingly to wireless devices (smartphones, tablets, laptops, netbooks, etc).
“As a wireless broadband technology Wi-Fi is evolving rapidly with significant improvements in throughput, coverage and reliability. Wi-Fi technologies are now capable of providing seamless hand-off and extensive metropolitan area coverage,” the release continues.
“Wi-Fi is in virtually all portable consumer devices and customers are actively seeking Wi-Fi hot spots to reduce data costs and improve their wireless broadband experience. The vast majority of tablets sold to date are Wi-Fi only devices. Wireless broadband is increasingly viewed as a portable and nomadic service for the consumption of media rich content and video.
“Major wireless carriers worldwide are deploying Wi-Fi as means of offloading 3G/4G traffic thereby reducing network build costs, and improving capacity and coverage. We believe cable operators are uniquely positioned to take advantage of Wi-Fi.”
Plus, Wi-Fi spectrum is free and there are no device subsidies, so extensive Wi-Fi coverage can be built far more cheaply. And as for voice? With a broadband connection, consumers can find an app on their own to make voice work for them.
"We have decided to focus on strengthening our core business and leveraging our media and programming assets to support our leadership position in broadband and video," said Brad Shaw, CEO. "Our decision not to pursue a conventional wireless business is consistent with this strategic approach and our focus on shareholder value."
Shaw will be holding a conference call today at 11 am ET with financial analysts only to discuss additional details (such as what the company will do with its AWS spectrum and whether or not it will be a buyer in the 700 MHz auction). We’ll be listening in, so stay tuned.
