Shaw Communications Inc. says its tapping the brakes on its planned wireless rollout just months after announcing a delayed launch of the new business.
Chief executive Brad Shaw said Wednesday in the company’s quarterly earnings report that Shaw would instead focus on its overall operations, which include cable, satellite, internet and extensive TV broadcasting services.
“We plan to slow our wireless build activities as we carefully consider all options in advance of the launch of a wireless service,” he said in a release.
“We continue to focus heavily on the strength of our core business and intend to make important investments in new technology platforms, digital reclamation and broadband capacity in order to ensure we maintain our technological leadership.”
In January, Shaw pushed back the start date of its wireless division by three months into early 2012, citing the rapid evolution of wireless technology and market conditions.
A number of new players have entered the Canadian wireless market in the last year or so, making it far more competitive and squeezing profit margins for the traditional dominant players – Rogers Communications, Bell Mobility and Telus Corp.
As well, Shaw is still digesting the $2 billion acquisition of the former Canwest Global TV stations, a deal last year that made the Calgary company a major private broadcaster.
Earlier today, Shaw reported that its profits rose 20.6% in the second quarter to $167.3 million or 37 cents per share. The results were in line with average predictions from analysts compiled by Thomson Reuters, and above a profit of $138.7 million, or 32 cents a share posted a year earlier.
Revenue increased 28.8% to $1.2 billion from $929.1 million in the comparable period of last year.
The Calgary-based telecommunications company has been restructuring its operations in recent months and said it expects to book about $25 million to $30 million as part of recent layoffs of 550 employees, which included 150 staff in management roles.
Shaw expects to save more than $50 million annually through the effort.
