# Shaw Communications (SJR.B)



## AMABILE (Apr 3, 2009)

i have a large position in bce
i have a small position in telus
should i add to telus or
start a position in shaw (sjr.b)


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## Eder (Feb 16, 2011)

Here's what I think...Shaw will need huge dollars to ramp up to begin to compete with Telus cellular services for years to come. They may issue more debt/shares who knows. Lots of risk. Shareholders have no say in any of this. I'm out.

But I did sidle up to the Telus trough today.


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## OurBigFatWallet (Jan 20, 2014)

More details on the deal to buy Wind Mobile for $1.6B: http://www.cbc.ca/news/business/shaw-wind-mobile-1.3368863


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## kcowan (Jul 1, 2010)

Eder said:


> But I did sidle up to the Telus trough today.


Yea I think it is a sign that Telus is hurting them. Whether they can hurt back remains to be seen.


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## Flash (Nov 25, 2014)

Eder said:


> Here's what I think...Shaw will need huge dollars to ramp up to begin to compete with Telus cellular services for years to come. They may issue more debt/shares who knows. Lots of risk. Shareholders have no say in any of this. I'm out.
> 
> But I did sidle up to the Telus trough today.


What is that risk? It's the 4th biggest teleco and 2nd biggest in the west (with BCE and Rogers mainly in the east for non-cell services). For TV/Internet/Home Phone it's mainly Telus and Shaw. Also Telus and Shaw are the least hated big telecos out there, with so many that i know that detest B(h)ell and Robbelus (as they like to say it).

I for one don't see why the shares are plummeting after this announcement (if anything I would think they would go up). I think I might get a bit of this and add to my BCE and Telus positions. The dividend flow will be very nice for the next several years.


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## AMABILE (Apr 3, 2009)

i'll start a position in sjr.b on monday.
( hit 52 wk low to-day @ 23.59)
very good entry point , don't you think ?


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## andrewf (Mar 1, 2010)

They call Rogers Robbers. Robellus refers to the Big Three (one big oligopolistic family). We may have to amend that to Robellushaw. I hope Shaw makes Wind into more of a T-Mobile, rather than merely trying to cozy up to the Big 3 (who will resist the loss of share anyway).

I can see Shaw partnering with Quebecor/Videotron since they have spectrum that Shaw would find useful.


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## Eder (Feb 16, 2011)

Flash said:


> What is that risk?


I think the biggest risk is the cost to build out to actually compete...they need LTE Canada wide...should burn billions of cash/debt/ maybe they issue more shares. I think their debt goes up and future dividend increases disappear for a bit. 
The fact they bought Wind tells me Telus was eating their lunch.


Having said that I'll buy in if share price drops under $20. They have been and are a great business.


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## doctrine (Sep 30, 2011)

Telus is eating their lunch. Shaw currently only survives because they raise prices faster than they lose customers. Hardly a model of success. I have all faith that they will find a way to screw up the acquisition.


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## kcowan (Jul 1, 2010)

Shaw buys spectrum. Then they sell it (granted at a healthy profit). Then they pass on Wind when it is on sale. Now they buy Wind at a huge premium. And the commonly believed reason is to stem the loss of TV share to Telus. I think this is a major indicator that Telus is a bargain.

(I have Shaw Internet, Telus home phone, Rogers Paygo x2 and Shaw Direct. The savings on using Shaw Direct in 2 locations compensates for all the bundle discounts.)


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## My Own Advisor (Sep 24, 2012)

Happy to own all four, although SJR.B is my lowest holding.


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## fatcat (Nov 11, 2009)

i think shaw is going to be doing something with its wifi access hotspots of which they have over 70K
something along the lines of allowing a mixed use of cell and wifi for calling and data
for example, i could see them bringing out their own voip app and advertising the synergy for cost savings

my experience with shaw has been stellar and their prices are so low for me that i can't afford to change

my problem is the influence of the shaw family and you never really know how their interests are intersecting with the company at large

can't decide whether to buy back in or add some rogers to my bce and telus
i will definitely add more telus

remember that telus doesn't own any content at all and shaw does


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## Eder (Feb 16, 2011)

I agree...content arguably will become more important than anything. This is where Rogers is setting the pace.


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## kcowan (Jul 1, 2010)

fatcat said:


> remember that telus doesn't own any content at all and shaw does


yes monetizing the content seems to be an elusive goal.


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## godblsmnymkr (Jul 15, 2015)

http://www.theglobeandmail.com/repo...ense-as-megahertz-pop-metric/article27871625/


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## fatcat (Nov 11, 2009)

godblsmnymkr said:


> http://www.theglobeandmail.com/repo...ense-as-megahertz-pop-metric/article27871625/


i am not an unlimited subscriber can you give a quick summary of the article ?


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## Flash (Nov 25, 2014)

I already own Telus (for the west) and BCE in the east. The price of Shaw atm is very tempting, but is it a smart decision to buy Shaw and own 2 direct competitors in the west?


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## godblsmnymkr (Jul 15, 2015)

fatcat said:


> i am not an unlimited subscriber can you give a quick summary of the article ?


Following news this week that Wind Mobile Corp. is suddenly worth $1.6-billion to Shaw Communications Inc., Bay Street analysts highlighted a key telecom metric that suggests Shaw is picking up a swath of valuable airwaves covering heavily populated areas for a pretty reasonable price.

Shaw is paying a lot for a ready-made entry into the wireless business – which will be a much-needed complement to its Internet and cable operations – and it’s a significant markup over the approximately $300-million Wind’s financial backers paid to acquire the company just over a year ago.

On a strategic level, the price reflects the value of scarcity: Wind may still be small and its network needs investment, but it is the only remaining independent wireless operator in Ontario, British Columbia and Alberta and it offers Shaw access to a crucial line of revenue with growth potential.

But the price can also be considered on a granular basis by looking at what Shaw will pay per “megahertz-pop.” This is one of the more technical metrics telecom-industry types employ to analyze prices paid for spectrum, the wireless airwaves used to build cellular networks.

The MHz-POP measurement takes into account the price paid, divided by the bandwidth (or megahertz) of the spectrum licences, multiplied by the number of people who live in the area the licences cover (population).

Over the past year, Wind has bulked up its spectrum holdings significantly, winning airwaves in a public auction and also acquiring a swath of licences Rogers Communications Inc. divested after its purchase of Mobilicity and completion of a two-year-old option deal to buy unused spectrum from Shaw.

Wind’s spectrum portfolio has increased by 172 per cent year over year, according to the company, and it now has 50 MHz of spectrum in all of its key operating areas.

Looking strictly at the value of the licences, Shaw said the deal works out to $1.57 per MHz-POP.

Excluding one-time costs related to the transaction and assigning Wind’s operating business a value of 8 times EBITDA (earnings before interest, taxes, depreciation and amortization), Shaw said it will pay $1.06 per MHz-POP for the spectrum (Wind is expected to have EBITDA of $65-million for 2015).

For the sake of comparison, in this year’s auction for AWS-3 (advanced wireless services) spectrum, BCE Inc. and Telus Corp. paid in the range of $3 per MHz-POP for the licences they acquired, according to a Canaccord Genuity estimate. A similar auction in the United States saw average prices of about $2.71 (U.S.) per MHz-POP.

Of course, Wind acquired its airwaves at a steep discount thanks to government policies designed to support new entrants to the industry, paying an average price of just 10 cents (Canadian) per MHz-POP for its AWS-3 licences and walking away with essentially free spectrum after the Rogers/Mobilicity deal.

The price Shaw will pay for Wind’s spectrum is also less than what Rogers paid for Mobilicity, which had far fewer subscribers than Wind’s 940,000 and was under creditor protection. Various analysts estimated the price of the $465-million deal worked out to between $2 and $2.35 per MHz-POP for the spectrum Rogers retained, after factoring in the value of tax losses.

It should be noted that the Rogers deal was a complicated transaction that facilitated the completion of its option agreement with Shaw and there was another bidder, Telus, in the running – all factors that play into valuation beyond MHz-POP calculations.

Desjardins Securities analyst Maher Yaghi cautioned this week: “It is important to note that airwaves on their own do not generate cash – you need to load them with customers, and those customers need to pay to get on the network. He said it would only be “after seeing the loading of the network” that one could say with certainty whether paying $1.57 per MHz-POP was a fair price.

Before that time, Mr. Yaghi said, “Our view is that combining Shaw’s customer service and brand awareness coupled with the potential to bundle wireless services for its existing customer base should, over the long term, create value for shareholders.”


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## fatcat (Nov 11, 2009)

thanks for that godblsmnymkr


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## Tourist9394 (Jun 11, 2015)

fatcat said:


> i think shaw is going to be doing something with its wifi access hotspots of which they have over 70K
> something along the lines of allowing a mixed use of cell and wifi for calling and data
> for example, i could see them bringing out their own voip app and advertising the synergy for cost savings
> 
> ...


Feel the same way about Shaw, they offer very good service in Canada West. Also ShawGoWifi is very usefull here in the Westcoast. If they can some how align their wifi network into their cell network, it can be a tough competitor for Telus. Sick of Telus customer service, everytime I have to wait for one hour for somebody to pick up the phone.

The Shaw stock structure does worry me much, too much influence from the Shaw family. This is why the stock is deemed unattractive for most retail investors.


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## andrewf (Mar 1, 2010)

I wonder if they may partner with Google. Google is working with Sprint and T-Mobile in the US (Google Fi is what the product is called) and it seamlessly switches from cellular to vetted wifi networks as a way of offering lower cost service. It sounds like Shaw would be in a good position to offer a similar kind of service. They offer unlimited domestic calling for $20, and pay-per-use data at $10/GB.


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## fatcat (Nov 11, 2009)

andrewf said:


> I wonder if they may partner with Google. Google is working with Sprint and T-Mobile in the US (Google Fi is what the product is called) and it seamlessly switches from cellular to vetted wifi networks as a way of offering lower cost service. It sounds like Shaw would be in a good position to offer a similar kind of service. They offer unlimited domestic calling for $20, and pay-per-use data at $10/GB.


exactly, they make a big deal out of their wifi access .. it works well in high-density areas, not so great in low density areas but the high density areas alone would allow them to synergize exactly like google-fi and do cellular-wifi handoffs

i am on an old grandfathered 10GB download speed plan and i routinely get 20GB, they have big pipes and could offer the west especially a terrific and compelling product

shaw phone is voip so they know how to make this work


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## kcowan (Jul 1, 2010)

I would never buy their stock. I think they do not have a strategy. They seem to react to opportunity. Like why buy Global when they could not monetize it on mobile? Why buy spectrum and then resell it?

As a retired management consultant, I see no direction in the executive suite.


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## Tourist9394 (Jun 11, 2015)

Their strategy of ShawGoWifi did not appeal much when it first started, but most youths can't live in Urban area efficiently without this service.


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## kcowan (Jul 1, 2010)

I heard on the news that the Shaw family got $50 million too much from their Corus manoeuvre. It seems that the spots have not changed.


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## milhouse (Nov 16, 2016)

Shaw is offering voluntary departure packages to about 6500 of their 14000 employees with an expected 10% acceptance rate. They pretty much have to go in this direction as services are moving towards a low cost, low revenue self serve models. Need to cut costs out of operations.


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## robfordlives (Sep 18, 2014)

I own all the telecoms, I believe around 6% of my total portfolio. They ultimately control access so yea you can ditch the cable package to only run Netflix in your house but they will find a way to jack up the internet rate then. Same with phones- people want more and more data and they will have to pay for it. The price war that happened in November was stupid for all of them but was limited in duration.


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## milhouse (Nov 16, 2016)

robfordlives said:


> I own all the telecoms, I believe around 6% of my total portfolio. They ultimately control access so yea you can ditch the cable package to only run Netflix in your house but they will find a way to jack up the internet rate then. Same with phones- people want more and more data and they will have to pay for it. The price war that happened in November was stupid for all of them but was limited in duration.


Bad for consumers, good for shareholders. 
Shaw's promo pricin on their Bluesky TV and Internet has ended per their Q4 review so their margins and profitability should be going up over the next year along with Telus' since they had to match Shaw's promo's at the time.


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## gardner (Feb 13, 2014)

robfordlives said:


> They ultimately control access


That's kind of how I've been looking at things. Telus and Shaw still own the wires and fundamentally you have to pay them to be connected to the world, even if you only want iTunes and Netflix.


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## My Own Advisor (Sep 24, 2012)

I used to own Shaw years ago but since dropped it. I simply don't like how the Shaw family runs its business. Not a fan. Hopefully good for shareholders long-term.


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