Shaw Holds Off on Launching Wireless Service

ShawPreviously, we covered the Canadian wireless spectrum auction, which promised to increase wireless competition with seven new companies awarded licenses. One of these new entrants was Shaw Communications, acquiring $190M worth of spectrum in BC, Alberta, Winnipeg, Saskatchewan, and Northern Ontario. Unfortunately, the Globe and Mail reports that everyone’s favorite elephant-in-the-room, Global Economic Uncertainty, has led Shaw to put off plans to launch a wireless service for “at least a year”.

During the time Mr. Shaw and his team weighed options, economic conditions deteriorated, giving the executives even more confidence in their ultimate decision. In a bad economy, families stay home and watch more television, so the company has decided to invest in its cable offerings for now, such as adding more high-definition programming.

“We felt it more prudent to develop our core business right now, and not divert any of our attention away from our mainstream products. It’s like you don’t want to buy the neighbour’s house when your house isn’t fixed up,” Mr. Shaw says. “It’s really about where do you put your money and at what time. And we think this is the best spot to put it in right now, and that the time will come for cellular.”

People prefer TV in a recession? Bothersome, but valid. I’d say people will also prefer the Internet, but I suppose that still falls under Shaw’s core business. A new wireless service would have to compete aggressively on price and service, and the ROI on building out wireless infrastructure is likely not strong enough at this time.

This move in contrast to other spectrum buyers Quebecor and Globalive. Quebecor recently announced plans to go ahead and make use of their spectrum space with an $800M 3G network in Quebec. Ontario and Western Canada should still see some wireless competition courtesy of Globalive, which has pledged to launch wireless service in Toronto, Vancouver, Calgary, Edmonton, and Ottawa, starting in the 2nd half of 2009.