Shaw Says iPhone Has Transformed Freedom Mobile as Subscribers Surge

Shaw announced their Q1 2018 fiscal results today and revealed stats about their wireless provider Freedom Mobile.

According to Shaw, 34,000 net wireless subscribers were added in September-November of 2017, taking their wireless total to 1.18 million. The wireless additions were more than triple compared the year ago quarter, which only saw 9,500 net additions.

Shaw saw their wireless revenue increase 26.8 per cent to $175 million in the first quarter.

Company president Jay Mehr told analysts in a conference call he feels Freedom Mobile is ready to take on Rogers, Telus and Bell, especially after seeing what happened in December, when the company launched iPhone sales for the first time (via Canadian Press).

“It does feel like a new business, starting in December,” said Mehr, adding the addition of the iPhone “has changed all aspects of our wireless business.” Freedom Mobile offered iPhone X, iPhone 8 and iPhone 8 Plus for $0 on contract to customers, a significant discounted compared to incumbents.

Freedom Mobile’s average revenue per user (ARPU) before the iPhone was $37 per month, but Shaw wants to take that above $50, now that their LTE network upgrades are rolling out, which support the iPhone (older AWS spectrum is also being refarmed to support older iPhones).

“In Q2, we haven’t put any energy into BYOD…It’s hard to say two things at once and we’ve been saying iPhone as loudly as anyone will listen,” said Mehr.

Shaw expects ARPU to pick up in Q3 and Q4 and continue into their 2019 fiscal year.

Shaw Admits Big 3 $60/10GB Promo Stole Customers

When Rogers, Telus and Bell caused a wireless feeding frenzy with a limited time $60/10GB promo plan in December, it stole some Freedom Mobile customers, with Mehr commenting
“To be clear, our 3G base is exposed to those kinds of things. . . . We were certainly exposed over those four or five days.”

But still, Freedom countered with a lower $50/10GB plan, which helped the carrier also nab leads from the Big 3, said Mehr: “Our gross sales held up nicely and we continued to get lots of movement from the Big Three, but they got some movement from us over that period of time.”

Shaw says the Big 3 did damper some of the company’s optimism for Q2, but overall, Mehr said “If the Big Three want to activate the market, we’ll win because we’ll benefit from people shopping around.”

Analysts, such as Drew McReynolds of RBC Dominion Securities did not seem too worried about Freedom Mobile’s impact, concluding after the conference call “this incremental impact will remain manageable for BCE, Rogers and Telus.”