Freedom ‘less vulnerable’ to COVID than incumbents: McAleese

While it’s too early to tell what impact COVID-19 will have on Shaw Communications Inc., the company believes its wireless division will do well with budget-conscious consumers going through a difficult economic time, financial analysts heard Thursday. Paul McAleese, who just began his new role as Shaw president, said the current quarter, which the company will report in three months’ time, will likely be a “lost” one for wireless growth. But he said there are advantages too. “I think we’re in a great place. We’re really well-positioned competitively, both during the pandemic and I think post-pandemic,” McAleese outlined on the late-afternoon call. The company’s lower average revenue per user and what McAleese described as “more overall value than the incumbents... makes us a less vulnerable household expense than some of our peers.” He said anecdotally there have been specific instances where people on more expensive plans had reached out to him and switched over to Freedom “simply because they’re starting to spend more time looking at their bills than maybe they would have in a pre-COVID world.” “So I like what that signals for me. It’s early days and it’s a small sample, but those things usually come true,” McAleese said. McAleese predicted: “As you exit the pandemic and we emerge from this crisis, the value position we’ve established for Freedom in the last two to three years is going to resonate even more with Canadians.” CEO Brad Shaw said earlier on the call that to describe the past few weeks as “extremely challenging would be an understatement, both professionally and personally.” Shaw’s father and company founder JR Shaw died in late March, while the company, like other telecoms, has been grappling with the effects of COVID-19 and resulting shut down of much of the country. “We are still in the relatively early stages of this pandemic, making it difficult to know the degree to which we could be affected,” Shaw said. Shaw noted the company, like other telecoms, has seen significant increases in network usage, now that most Canadians are working and studying at home. “On our wireline network, traffic has increased by as much as 50 per cent, and what used to be a peak period that lasted for three to four hours in the evenings, has now become over 12 hours of peak usage, seven days a week,” Shaw said. On the wireless side, customers are using less data and more WiFi, he said, though there has been a 25-per-cent increase in voice traffic, “as more calls are being placed to friends, family and colleagues on a daily basis.” He also said the rate of customers who are connecting services by themselves has reached 100 per cent. Like Cogeco Inc. a day earlier, Shaw made adjustments to share repurchasing. It suspended any additional share repurchasing, and withdrew its previously-issued 2020 guidance. The quarterly results the company reported Thursday were for the quarter that ended Feb. 29, pre-dating the pandemic’s hit in Canada. Shaw reported quarterly revenues of $1.36 billion, up 3.7 per cent from the same three-month period a year earlier. Its net income was up 8.4 per cent to $167 million, which Shaw said was mostly due to a decrease in income tax expenses. In wireless, Shaw added 54,289 postpaid subscribers -- down from 64,670 in the same quarter in 2019 -- and lost 3,230 prepaid subscribers, down significantly from the 16,887 loss the year before. It ended the quarter with 1.77 million wireless subscribers. Average billing per user (ABPU) was $43.84, up from $41.05. Shaw said that increase was due to the number of customers who are signing up for higher-value plans. On the TV side, Shaw lost 19,310 consumer cable subscribers, fewer than the 28,953 it shed a year ago, ending the quarter with a total of 1.45 million cable subscribers. Shaw said that improvement was due to increases in customers signing up for service bundles. On the satellite side, Shaw was down 13,211 customers, more than the 9,627 it lost a year ago. It reported 658,137 satellite subscribers at the end of the quarter. The company added 6,072 consumer internet subscribers, fewer than the 11,105 it gained a year ago, for a total of 1.91 million at the end of the quarter. — With reporting by Anja Karadeglija at akarad@thewirereport.ca and editing by Adam Langenberg at alangenberg@thewirereport.ca

Freedom ‘less vulnerable’ to COVID than incumbents: McAleese

News | April 9, 2020

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

Freedom ‘less vulnerable’ to COVID than incumbents: McAleese

News | April 9, 2020

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

FREE TRIAL

SUBSCRIBE

Related Stories

Freedom Mobile no longer pursuing full MVNO status

European wireless outage had little effect on Canadian travellers, telcos say

ISED starts consultations on right to repair

Canadians happy with wireless plans after switching: CTA survey

Reuse & Permissions

Inside The Wire Report

Information

Hill Times Publishing

Get in Touch With Us