Shaw’s subscriber additions dampened by COVID lockdowns

Shaw Communications Inc. president Paul McAleese said that while there has not been a big shift in customer behavior during the COVID-19 pandemic, the company is still nervous about the months ahead, given the economic impact of the pandemic. "Because we're still seeing so much federal support for the folks that have been impacted by the pandemic, it is difficult to tell where this is all going to flush out. When the music stops there's definitely gonna be a degree of pressure on the household," McAleese said, adding that so far Shaw has not seen any "dramatic changes in customer behaviour" in terms of subscribers changing their plans. McAleese made the comments during a third-quarter earnings call with financial analysts covering the three months that ended May 31, the first quarterly results for the company reflecting the lockdowns that began in mid-March. As evidence, McAleese pointed to the fact that Shaw had raised its home internet prices in late May for new subscribers, making its plans more expensive than similar offerings by Telus Corp., but that "has not seen a major competitive shift, which is encouraging." Telus then raised its own prices this week, closing the gap between the two companies. In a note published Thursday, Canaccord Genuity’s Aravinda Galappatthige wrote that the closing of the price gap "marks the beginning of a march back towards a more rational wireline pricing structure in the West, and one more aligned with the East." The development, Galappatthige wrote, may serve to raise what are traditionally lower average revenue per user (ARPU) numbers in western Canada, closer to the more expensive internet plans in eastern Canada. In the wireless market, McAleese said that wireless subscriber adds will still be hampered by the slow traffic in retail locations like malls. "We do need that to come back," he said. "That cohort: in theory they're there," McAleese said, referring to potential new wireless subscribers. "We believe that we will be able to meet them when they are, but there are still some things that still have to kind of work their way through," he said, pointing to the unlimited data competition. "The pricing discipline, or lack thereof, at some of our competition has been astonishing to me," he said. McAleese in January said wireless pricing was "erratic," after having taken credit for the lower unlimited rates in June of last year. Overall revenue in the quarter dropped 0.8 per cent, down to $1.31 billion from $1.32 billion in the same quarter last year. The company's net income fell 18.9 per cent, down to $184 million from $227 million in the same period a year ago. "The year-over-year decrease in consolidated revenue included a $12 million, or 1.3%, decrease in the Consumer division as growth in Internet revenue was offset by declines in Video, Satellite and Phone subscribers and revenue," the company said in its quarterly earnings report. Subscribers were down across almost all of Shaw's divisions. Consumer cable subscriptions were down 21,604, fewer than the 24,303 the company lost in the same quarter last year, closing the quarter with a total of 1.42 million subscribers. In satellite, the company stayed relatively flat, losing just 110 subscribers in the quarter, down from the 3,134 they added in the same quarter last year, for a total 658,027 total satellite subscribers. In consumer home internet, the company lost 5,103 subscribers, down from the 6,647 they added in the quarter last year, finishing this quarter with a total of 1.92 million subscribers. In wireless, the company added 2,236 postpaid subscribers, significantly down from the 61,279 subscribers they added in the quarter last year. The company also lost 7,701 subscribers in prepaid, down from the 868 they added in the same quarter a year ago. Shaw now has a total of 1.76 million wireless subscribers. "As a result of temporary retail store closures combined with social distancing requirements related to COVID-19 that persisted throughout the quarter, wireless and wireline subscriber acquisition activity was muted," Shaw said in its quarterly earnings report. Wireless average revenue per user (ARPU) was up 2.6 per cent, to $38.94 from $37.95 in the same quarter last year. The growth "reflects the increased number of wireless customers subscribing to higher service plans, partially offset by lower roaming revenue in the quarter due to less travel and roaming outside of the Freedom home network resulting from the impact of the COVID-19 pandemic," the company said in the report. — With reporting by Michael Lee-Murphy at mleemurphy@thewirereport.ca and editing by Anja Karadeglija at akarad@thewirereport.ca

Shaw’s subscriber additions dampened by COVID lockdowns

News | July 10, 2020

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