Shaw getting ready to raise prices for its main residential service, CEO says

Shaw getting ready to raise prices for its main residential service, CEO says
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CALGARY — Residential customers of Shaw Communications Inc. will likely see a price increase for their internet and television services, chief executive Brad Shaw said Thursday after the company’s annual meeting in Calgary.

Shaw’s chief competitor in Western Canada, Telus Corp., has already announced price increases that will take effect Feb. 25.

Shaw told reporters that the details of the cable, internet and wireless company’s price increases haven’t been decided but they will most likely take effect in April.

He said the cost of getting rights to sports programing is getting higher for Shaw and other Canadian television service providers, even though audiences are falling.

“It’s a real concern,” Shaw said. “How are Canadian companies even going to be able to compete?”

He said that Shaw doesn’t get special treatment from Toronto-based Corus Entertainment — a publicly traded company that’s partly owned by the Shaw family and Shaw Communications.

Corus owns more than 40 specialty television channels, some acquired along with the Global television network that it acquired from Shaw in April 2016.

“Even though they’re both family controlled, the family really says (they’ve) got to stand on (their) own,” Shaw said.

He said Corus has had a “fight on its hands” because of competition with other forms of entertainment, such as Netflix, but added that its most recent quarter was promising.

Corus reported last week that its overall revenue for the quarter ended Nov. 30 totalled $467.5 million, up from $457.4 million and above the estimate of $451.2 million. Its television division had the biggest revenue increase, rising to $426.2 million from $415.5 million a year earlier.

Despite the higher first-quarter revenue, Corus profit attributable to shareholders fell to $60.4 million, from $77.7 million a year earlier, partly because of its accounting for a revaluing of a TV brand that will be retired and replaced this year.

Shaw Communications, on the other hand, beat analyst estimates for both profit and revenue over the same period — mainly because of its Freedom Mobile wireless division. Its main cable and internet business, however, saw virtually no revenue growth as it lost video subscribers and home phone customers.

However, the profit margin at Shaw’s wireline residential services was up significantly from last year’s first quarter as management focused on optimizing its consumer business’ by removing costs where possible.

A year ago, Shaw Communications announced a major employee buyout program aimed primarily at its residential consumer business, as part of adopting to a new generation of network technology using the Comcast X1 platform.

Brad Shaw told reporters Thursday that it was “absolutely the right move” given the company’s need to be agile and more automated but added that the loss of 3,000 people “it’s a little bit emotional.”

— by David Paddon in Toronto

Companies in this story: (TSX:SJR.B, TSX:CJR.B)

The Canadian Press

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