Will Shaw go Wireless via Rogers?

News, discussion and questions about technology and computers, whether broadcast-related or not.

Will Shaw go Wireless via Rogers?

Postby jon » Fri Sep 30, 2011 8:36 am

Shaw-Rogers wireless partnership ‘a very viable option’
Jonathan Ratner
September 30, 2011
Financial Post

With Shaw Communications Inc. facing intensified competition from Telus Corp.’s IPTV offering, a new report suggests the Calgary-based telecom company could partner with Rogers Communications Inc. to offer wireless services.

In September 2011, Shaw announced that it was abandoning plans to offer wireless services and would instead roll out a Wi-Fi network in Western Canada. This would give Shaw customers Wi-Fi access at places like malls and coffee shops for computers, mobile phones and tablets.

The decision will save Shaw more than $1-billion in capex and prevents the company from having to battle it out in a very competitive wireless space. Yet it also leaves the company without a wireless product for its bundle offerings and eliminates the attractive growth a wireless business would provide.

That’s where Rogers could come in, according to Kevin Chu and Mark Rosen, analysts at Accountability Research Corp. They consider a wireless partnership with Rogers “a very viable option” for Shaw and see two ways this could be set up.

The first scenario would see Shaw act as an “authorized agent” for an incumbent carrier like Rogers. This would give Shaw customers access to that carrier’s wireless networks, as well as its device offerings, service plans and equipment. The analysts consider this the most likely option.

The other way a partnership may be structured would see Shaw forge a joint wireless network with an incumbent carrier, such as Rogers did with MTS Allstream in Manitoba.

Since Telus is Shaw’s main competitor in Western Canada, the analysts consider a deal between the two companies as unlikely. Similarly, BCE Inc. shares a wireless network with Telus, making a tie-up with Bell challenging.

That leaves Rogers as the most probable option. However, the analysts believe Shaw might lack bargaining power in such a deal.

“Perhaps the biggest question mark is how Rogers will perceive potential cannibalization of its existing wireless customer base and prospects in Western Canada should it partner with Shaw,” the analysts wrote in a report.

They suggested Shaw’s best bargaining chip may be providing Rogers with access to its the 20 MHz of spectrum acquired in the 2008 auction, something no one else can offer.

As a result, the analysts nonetheless think the idea is doable, citing a similar arrangement Telus has in offering Bell ExpressVu service under the Telus Satellite TV brand.

Since wireless products in its bundle offerings would allow Shaw to offer a quadruple play on services (wireless, Internet, cable and home phone), it could keep customers more captive through discounts. Telus offers all four services and therefore serves as a one-stop shop.

While investors were counting on the future earnings growth a wireless business would provide Shaw, the analysts suggested the savings could translate into a more aggressive dividend as a result of the free cash flow boost. At a minimum, they see this providing strong support for Shaw’s existing dividend, which happens to produce one of the highest yields in the North American cable sector.

A wireless partnership with Rogers would prompt the analysts to upgrade their rating on Shaw, which currently stands at Hold with at $22.50 target price. The stock closed at $20.94 on Thursday.

ref. - http://business.financialpost.com/2011/ ... le-option/
User avatar
jon
Advanced Member
 
Posts: 9257
Joined: Mon May 08, 2006 10:15 am
Location: Edmonton

Re: Will Shaw go Wireless via Rogers?

Postby Howaboutthat » Fri Sep 30, 2011 9:19 am

I love these analysts no one's ever heard of speculating out loud. Did anyone check to see if they own shares of either of the companies they're discussing?
Wasn't it one analyst who yesterday speculated that RIM was shutting down production of the Playbook? It was big news for about 30 minutes until RIM was forced to deny it.
Seems some of these lesser-knowns (or not known at alls) are trying to make names for themselves and will go to any length.
Pathetic.
Houston, We're dealing with morons!.
User avatar
Howaboutthat
Advanced Member
 
Posts: 2509
Joined: Fri Jul 13, 2007 9:28 pm
Location: Vernon


Return to Computer & Technology News

Who is online

Users browsing this forum: No registered users and 113 guests