Another north American cableco in 3G U-turn

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Another north American cableco in 3G U-turn

Shaw drops plans to build out its own network, mirroring Cox and Cablevision in the US, but SaskTel proceeds with LTE

By CAROLINE GABRIEL

Published: 6 September, 2011

READ MORE: Spectrum | Canada | Cable | LTE

Contrasting decisions were made this week in Canada, which is trying to open up its mobile market with new competitors to the triumvirate of Bell Canada, Telus and Rogers. One of the hopeful new entrants, the leading cableco Shaw Communications, has abandoned its plans to build its own mobile network, mirroring a similar U-turn by cable operator Cox in the US. But regional provider SaskTel is steaming ahead with LTE services.

Shaw highlighted challenges which will affect all the new players seeking to steal share from the hugely entrenched big three, namely the high cost of building out from scratch, especially as Bell and Telus are reducing their own costs by engaging in a network sharing deal for 4G. A Shaw spokesperson said: "New entrants lack the economies of scale and scope to compete effectively against well established incumbents with ubiquitous coverage, extensive device ecosystems, deep spectrum positions and large retail networks. Even with our established base and considerable strengths and assets, we could not justify a wireless network build at this time."

Shaw has clearly been looking over the border at the various attempts by US cablecos to move into wireless services and towards a quad play. It had hoped for a joint venture - akin to that between Comcast, Time Warner and others in the US - with rival pay-TV provider Rogers Communications, which not only offers broadband and TV but also has a broad wireless footprint. However, negotiations with Rogers broke down, leaving Shaw's wireless licences - acquired in 2008 for C$190m ($183m) - looking less of an asset. Recently, Cox Communications decided to abandon plans to build out its own spectrum with 3G, and to extend its existing MVNO deal with Sprint, and Shaw may also look for such a partnership in Canada. For now, its strategy is closer to that of Cablevision in the north east US, relying on a broad Wi-Fi hotspot deployment to support broadband access on the move, and bundled services, for its customers.

By contrast, another smaller player, full service telco SaskTel, has started work on LTE roll-out plans in its Saskatchewan region, looking to go live in the third quarter of 2012. Bill Boyd, minister responsible for SaskTel, said in a statement: "SaskTel has a solid technology evolution plan that will ensure Saskatchewan residents continue to benefit from the most advanced wireless technology available. The initial LTE phones will be compatible with the 4G network and will seamlessly transmit voice over the 4G network and data over LTE until LTE is set up for both voice and data."