Bigger, cheaper data plans thanks to us: Shaw

The price of data is coming down and the size of data packages is going up, all thanks to market pressure introduced by Shaw Communications Inc.’s Freedom Mobile wireless brand, according to Shaw. The wireless brand, Shaw CEO Brad Shaw said Thursday in a third quarter earnings call, has “permanently changed the Canadian wireless industry with our big gig plans,” which Shaw said has forced the incumbents to drop their prices to compete. “For the Big Three, these new rate plans offer a dramatic about face from the expensive data overages that their customers have been paying for years,” Shaw said in his opening remarks to analysts. Indeed, when Freedom Mobile introduced its “big gig” plans back in 2017 -- offering a base rate 10 GB of data for $50 a month -- it sent shockwaves through the broader wireless industry, with the incumbent providers quickly following suit. Just over a year later in November of 2018, Freedom Mobile upped the ante, introducing a limited offer of 100 GB for customers already on the Big Gig plan. Earlier this month, Rogers Communications Inc. launched a permanent new no-overage-fee wireless plan, with BCE Inc., Telus Corp., Bragg Communications Inc.’s Eastlink, and Quebecor Inc.’s Videotron quickly offering similar limited-time promos. Shaw, too, increased from 4 GB to 5 GB the bonus it had been offering on any plan over $40 a month. Paul McAleese, president of Shaw’s wireless division, reiterated the point later in the call, saying that Freedom Mobile’s impact on wireless affordability is “indisputable.” “If wasn’t clear before, it certainly is clear now. So It’s nice to see the incumbents coming down and sorta chasing us in that regard,” McAleese said. Last month, at an investors conference in Toronto, McAleese cited Shaw’s impact on the wireless industry as reasoning behind the company’s opposition to mandated access for MVNOs to incumbent networks, reiterating what the company told the CRTC the previous week. MVNOs would be “more of a disadvantage for the only people driving change in the Canadian market, which are the regional players,” McAleese told investors at the May TD Capital Markets conference. Elsewhere in the quarterly report, consolidated revenue increased 2.7 per cent to $1.32 billion, which was somewhat lower than the $1.33 billion estimated by Canaccord Genuity’s Aravinda Galappatthige. “The miss here was primarily wireless as equipment revenue, which is generally very low margin and as such does not create significant concern,” he wrote in a note after the release of the report. The company’s net income for the third quarter was $229 million, whereas it was a $99 million loss in the same period last year. The increase, according the report, was “primarily due to a lower loss associated with the investment in Corus, a deferred tax benefit associated with the future reduction in Alberta’s corporate tax rate announced in May 2019, and gains on the dispositions of certain real estate holdings and minor investments in fiscal 2019.” In addition to the gains made from off loading its $548 million stake in Corus, Shaw saw savings from some 350 employees leaving the company under its Voluntary Departure Program, part of its overall restructuring. Unionized workers voted to strike in the summer of 2018 in response to some of the reforms. Shaw added 61,279 postpaid wireless subscribers for a total of 1.24 million postpaid wireless subscribers, along with 820 prepaid subs. The company now has 1.58 million wireless subscribers altogether. On the wireline side, they lost 24,303 cable subscribers, but added 6,647 internet subs for a total of 1.51 million cable subscribers and 1.9 million internet subscribers. Average billing per wireless user (ABPU) increased to $42.20 from $39.84 from the same period last year, while the average revenue per wireless user increased to $38.36 from $37.54 in the third quarter of 2018. The higher ABPU number, Shaw said in the report, reflects the “increased number of customers that are subscribing to higher value service plans and purchasing a device through Freedom Mobile.” The ARPU number, the report said, reflects the change in device subsidy accounting. Where the subsidy used to be allocated as a reduction in equipment revenue, it is now “partially allocated” as a reduction in service revenue. — With reporting by Michael Lee-Murphy at mleemurphy@thewirereport.ca and editing by Anja Karadeglija at akarad@thewirereport.ca

Bigger, cheaper data plans thanks to us: Shaw

News | June 27, 2019

Unlock all the Canadian telecom, broadcasting and digital media news you need.

FREE TRIAL

SUBSCRIBE

Inside The Wire Report

Information

Hill Times Publishing

Get in Touch With Us

Bigger, cheaper data plans thanks to us: Shaw

News | June 27, 2019

Unlock all the Canadian telecom, broadcasting and digital media news you need.

FREE TRIAL

SUBSCRIBE

Related Stories

Freedom launches new roaming plan covering 73 destinations

“Different world, different landscape” says PKP in first earnings report since Freedom buy

15,000 Shaw customers affected by breach

Freedom says data strategy attracting higher-value customers

Reuse & Permissions

Inside The Wire Report

Information

Hill Times Publishing

Get in Touch With Us