Shaw Communications eyes 2011 wireless launch
By John McCrank
TORONTO (Reuters) - Shaw Communications Inc plans to launch a wireless service in late 2011, the Canadian cable and telecom company said on Friday as it posted an 11 percent drop in quarterly profit, in line with expectations.
Shaw, which is a major player in Western Canada, said it will invest about C$100 million ($100 million) in wireless in the second half of 2010.
The Calgary-based company plans to spend "slightly more" than C$100 million in each of the following few years as it builds up its network, Chief Executive Jim Shaw said on a conference call with analysts.
The market has keenly awaited details of the launch since Shaw spent C$189.5 million in a government auction of wireless spectrum in 2008 that is expected to shake up the industry as new players enter the market.
Shaw is largely seen as a dividend stock and one caution that investors may have on the capital budget for wireless is that it could end up eating into the regular payouts, said Greg MacDonald, an analyst at National Bank Financial.
"Investors should not be concerned ... this company is not going to cut its dividend," he said. "It's got a very strong balance sheet, in fact it's got C$670 million in cash and short-term investments, more than enough to cover this investment."
MARKET TO GET A LOT MORE CROWDED
Canada's wireless industry is currently dominated by Rogers Communications, Telus Corp, and BCE Inc, which control about 95 percent of the market. Continued...