We continue to maintain Neutral recommendation on
Shaw Communications Inc. (
, as the company reported impressive results in the last quarter.
The company added 246 digital TV customers. Digital TV penetration
rate is now 6.1% of basic cable TV. Furthermore, Digital phone
lines were 1,339,559, reflecting a year-over-year net addition of
29,142. Quarterly EBITDA margin was 47.5% compared with 43.8% in
the prior-year quarter.
Shaw Communications deployed high-speed DOCSIS 3.0 network in
several western Canadian markets under the brand name of "Nitro
Internet Service". This technology offers 100 Mbps download speed.
Nitro Internet Service is the fastest Internet service available in
Canada. The company launched Shaw Gateway service that offers more
than 1,200 HD Video-on-Demand titles while enabling clients to link
pictures and content from their computer to their television. The
company launched its Personal Video Recorder service, enabling its
viewers to record popular shows with 500 GB capacity as well as
support full HD video delivery.
So, we believe that the launch of such advanced services will
continue to drive customer additions in the upcoming quarters.
Moreover, Shaw Communications is gradually expanding its Wi-Fi
network, which will further act as a catalyst for subscriber
On the flip side, dampness in the Canadian advertisement market
has forced the company to lower its previous outlook for fiscal
2012. Higher promotional activities, however, are adversely
impacting its bottom line and free cash flow.
Shaw Communications offers triple-play cable TV and satellite
TV, Internet, and wireline phone services, whereas its main
) offers Cable TV, Internet, wireline, and wireless services. Telus
shares a national wireless network with Bell Canada, a division of
). Its popular Optik TV, offering IPTV services, is quickly eroding
Shaw's market share. In addition, Shaw Communications lacks a major
competitive weapon, which is the wireless service.
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