Shomi Shutdown Sends Shaw’s Profits Down in First Fiscal Quarter
The shutdown of the video streaming business Shomi has heavily affected Shaw Communications’ profits, the quarterly earnings release reveals. It’s wireless segment also failed to shine, but that was on purpose, the company CEO said (via BNN).
During the first fiscal quarter, which ended November 30, 2016, Shaw reported a 14.9% increase in revenue to $1.3 billion. It’s wireless business, the former Wind Mobile that Shaw acquired in early 2016 and recently rebranded as Freedom Mobile, added only 14,307 net postpaid subscribers, which pales in comparison to the 27,000 added in the previous quarter.
Company CEO Brad Shaw says the slowdown in wireless was on purpose as they prepare for the rebrand and build out a network upgrade.
“We’re not going to launch customers on the old network and have them come back a month later and say ‘I’d like to have a new phone on the new network,'” he told reporters after the company’s annual general meeting.
Shaw also acknowledged that it is facing competition from the wireless incumbent Telus, so that also affects Freedom Mobile’s growth. Its businesses that have been around for a while, on the other hand, performed according to expectations, despite Shaw losing cable subscription accounts and satellite accounts. The company added almost 17,000 consumer internet accounts during the first fiscal quarter.
Shaw launched a television product based on Comcast’s X1 platform just this Wednesday in an effort to compete with Telus’ Optik TV.
The shutdown of its video streaming business, however, brought a $107 million bill, which helped cut Shaw’s income to $89 million, down from $218 million the same period a year ago.