(Reuters) - Shaw Communications Inc on Wednesday reported strong quarterly subscriber gains at its revamped cable business and notched wireless profit growth even as it spent heavily to build up both businesses.
Shaw said its wireless business - the former Wind Mobile business it acquired in early 2016 and rebranded as Freedom Mobile in November - added 20,085 net postpaid customers in the third quarter ended May 31, with revenue jumping 16.7 percent from a year ago.
“They’ve been executing well on that business though there’s still a long way to go,” said Edward Jones analyst Dave Heger. “They’re making a slow transition to being a more formidable competitor in wireless.”
Calgary-based Shaw is locked in a fierce battle for internet, television and telephone customers in the west of the country with Vancouver-based rival Telus Corp.
“In the last month or two, it hasn’t gotten any easier, but we’ve got a strategy, and we’re focussed on our strategy and we’re going to continue to execute,” Jay Mehr, Shaw’s president, said on a call with analysts.
The company launched a renewed television product based on Comcast’s X1 video platform in January after losing market share at the hands of Telus’ Optik TV.
Shaw said its consumer unit added almost 13,000 cable subscribers and 6,000 satellite TV customers in the period, the first net TV growth since fiscal 2010. It also added some 20,000 internet additions.
The cable subscriber numbers were “surprisingly strong,” likely helped by the BlueSky product helping them both keep existing customers and attract new ones, analyst Heger said.
The company said a slip in operating income in the quarter was primarily due to marketing costs for the BlueSky launch. Shaw said it will need to spend C$350 million to deploy recently purchased spectrum for its wireless network.
Net income from continuing operations rose to C$164 million, or 33 Canadian cents per share, in the quarter, from C$74 million, or 14 Canadian cents per share, a year earlier.
Revenue was up 2.8 percent to C$1.31 billion.
Earlier this month Shaw sold its ViaWest data center subsidiary for $1.675 billion, using some of the proceeds to buy airwaves to boost its new wireless unit.
Overall, the results were largely in line with expectations, and its shares were unchanged at C$30.24.
Reporting by Alastair Sharp in Toronto and Yashaswini Swamynathan in Bangalore; Editing by Arun Koyyur and Jeffrey Benkoe