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Leading Canadian telecom operator Shaw Communications Inc. SJR has rebranded its wireless service as “Freedom Mobile” to emphasize on the company’s two unique selling points, “freedom from data overage” charges and “freedom from price-gouging”.
Notably, Shaw Communications ventured into the mobile arena after acquiring a 100% interest in Mid-Bowline Group Corp., the parent company of WIND Mobile Corp., for an enterprise value of approximately C$1.6 billion (around $1.16 billion) in Mar. 2016.
WIND Mobile was the fourth largest wireless operator in Canada with around 940,000 subscribers across Ontario, British Columbia and Alberta. In each of these markets the company holds 50MHz of spectrums. The acquisition of WIND Mobile will provide Shaw Communications the necessary economies of scale, crucial spectrums, a strong retail distribution chain and an installed base of wireless networks.
At present, Shaw Communications serves over 1 million wireless customers. WIND Mobile, which has now been renamed Freedom Mobile, has started offering high-speed 4G LTE (Long Term Evolution) service in Toronto and Vancouver. This service will be expanded across Canada in 2017. The LTE roaming service between Canada and the U.S. will start from early 2017. Shaw Communications currently carries a Zacks Rank #4 (Sell).
The Canadian wireless market is predominantly controlled by three big players, namely, Rogers Communications Inc. RCI, TELUS Corp. TU and BCE Inc. BCE. All three stocks currently carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Together, these three firms control around 90% of the total market. Although Freedom Mobile occupies the fourth spot, its current scale of operation considerably lags that of the three wireless giants. In 2013, TELUS bought small-sized wireless operator Public Mobile while Rogers Communications acquired Mobilicity in 2015.
Meanwhile, in addition to wireless network, Shaw Communications offers wireline telephony, high-speed Internet and video services to residential as well as business enterprises through its fiber optic, WiFi and cable TV services. The company currently serves around 3.2 million customers and has installed about 75,000 WiFi hotspots. With Freedom Mobile, Shaw Communications offers quad-play wireline telephony, high-speed Internet, video and wireless services, which are on par with the other three key telecom operators in Canada.
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