Shaw ditches $1bn cellphone venture

Shaw Communications has ditched a $1 billion plan to enter the hotly competitive cellphone business, opting instead to take a cheaper route by offering customers WiFi access that plugs into the company's broadband Internet network, according to the Globe and Mail. After initiating a strategic review of the venture, jump-started when the company paid $190 million for wireless licences in 2008, Shaw's executive team decided that it was not worth building a full cellular network and taking on incumbent giants and eager new entrants in an increasingly competitive sector. The Wall Street Journal reports that the Calgary-based cable television, Internet and satellite television operator will provide a managed WiFi network that will allow its customers to extend their Shaw services beyond the home. “This will achieve our objectives without risking well over C$1 billion in capital expenditures on a traditional wireless network build,” the company said in a statement. The coverage area of WiFi networks is typically smaller than traditional cellular networks, which are also more reliable in transmitting voice and data. “Shaw has absolutely no ability to retaliate in wireless while Telus is attacking them in wireline,” Reuters quotes Canaccord Genuity analyst Dvai Ghose, as saying. He adds that Shaw was in “a very unenviable strategic position”. Shares of Calgary, Alberta-based Shaw, which offers cable and satellite television, as well as Internet and home phone services, were down 2% at C$21.92 by midday Thursday. Vancouver-based Telus was down 0.15% at C$53.90.