Citing competitive concerns, Canadian telecommunications provider Shaw Communications Inc. (SJR) said it will forgo plans to build out a cellular network and will instead focus on a Wi-Fi-based mobile broadband solution.
“However, the economics of a conventional wireless business as a new entrant are extremely challenging,” the company noted. “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. Even with our established base and considerable strengths and assets, we could not justify a wireless network build at this time.”
Shaw had reported earlier this year that it was pushing back its planned cellular network launch until early 2012, which was about three months after its initial launch plans. The company said it planned to invest up to $200 million on the network and that the delay was so it could ensure “an exceptional customer experience.” The experience will now be reliant on Wi-Fi technology.
That initial delay was then extended as the company said it was trying to decide whether to go forward with its original plans for an HSPA+ network or wait to launch LTE services. Shaw picked up 18 wireless spectrum licenses covering parts of western Canada and Ontario during the 2008 AWS spectrum auction for approximately $190 million, but those licenses included just 20 megahertz of spectrum, which could limit the company’s ability to run two separate technologies. Shaw did note that it could participate in Canada’s upcoming 700 MHz spectrum auction to secure additional resources, though many of the nation’s larger players have since been aggressively positioning for a run at those licenses.
“We believe that a more prudent approach for us is to provide a managed Wi-Fi network that will allow our customers to extend their Shaw services beyond the home,” the company noted. “This will achieve our objectives without risking well over $1 billion in capital expenditures on a traditional wireless network build.”
The Canadian wireless market, traditionally dominated by its three largest operators Rogers Wireless, Bell Canada and Telus Mobility, has seen a number of smaller players begin to infiltrate the space following recent spectrum auctions.
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