Shaw Communications Inc. reported earnings for the second quarter of its fiscal 2022, ending February 28, 2022, on Wednesday, posting a net income of $196 million — down 9.7% year-over-year from $217 million in the same quarter last year (via Global News).
The sharp drop in earnings comes as the Calgary-based cable, internet, and wireless company vies for regulatory approval for its planned $16 billion CAD takeover by Rogers Communications Inc. (RCI), Canada’s largest telecom.
Shaw’s wireline business lost 58,100 subscribers in during Q2 2022, where declines in the company’s video, satellite, and phone subscriptions more than offset its “modest gain” in consumer internet connections, Shaw Communications said on Wednesday.
Revenue from Shaw’s wireline business overall, which typically accounts for more than three-quarters of the telecom’s total revenue, was down more than 1% year-over-year to $1.04 billion, with adjusted earnings dropping almost 6% to $509 million.
Total revenue for fiscal Q2 2022 was $1.36 billion, down 2% from $1.39 billion last year. Shaw’s profit for the quarter was $0.39 per share, as opposed to $0.43 per share during fiscal Q2 2021.
Shaw’s wireless business, however, posted healthy subscriber growth, with adjusted earnings going up 27% year-over-year to $123 million in the quarter. Shaw’s wireless segment operates in Alberta, British Columbia, and Ontario, covering almost half of Canada’s population of 38 million.
Unfortunately, the telecom’s wireless business has also become a bone of contention between the Rogers-Shaw tag-team and the federal government for regulatory approval of the formers’ proposed merger.
Even though the Canadian Radio-television and Telecommunications Commission (CRTC) approved Rogers’ acquisition of Shaw last month, the merger still requires approval from the Competition Bureau and the Ministry of Innovation, Science and Economic Development (ISED) Canada.
The Competition Bureau is looking at the merger’s possible impact on competition across relevant industries, while ISED Canada is evaluating the transfer of Shaw’s wireless spectrum licences to Rogers.
Last month, Industry Minister François-Philippe Champagne said the federal government would not allow “the wholesale transfer of Shaw’s wireless licences to Rogers” over concerns regarding competition in the space.
Rogers is now looking to sell Shaw’s wireless unit, Freedom Mobile, to obtain regulatory approval for the merger. Last week, Freedom Mobile’s original founder Anthony Lacavera upped his efforts to buy the wireless provider back from Shaw.
Despite the setback, Rogers and Shaw still expect to close the deal sometime in the first half of 2022, Shaw Communications CEO Bradley Shaw said in a recent release.