Two wireless startups who could benefit from Shaw Communications Inc.’s decision to build local Wi-Fi networks instead of getting into cellular
have sharply different views of the cable company’s strategy.
Dave Dobbin, CEO of Mobilicity and who has experience in building the kind of municipal mesh Wi-Fi network Shaw plans to build in Western Canadian cities, calls the move “brilliant,” while Wind Mobile chairman Anthony Lacavera doesn’t understand it.
Both carriers have service in Shaw’s territory in Vancouver, Calgary and Edmonton.
“I think it’s a great move for them,” said Dobbin.
He dismissed industry and financial analysts who think that as a cable company, Shaw needs cellular to compete with the cellular, Internet, home phone and IPTV services of incumbent phone companies in the Western provinces.
In particular, analysts say operators would be foolish to spurn the potential rich revenues from wireless data.
“You don’t have to sell multiple services to get customers,” retorted Dobbin. You have to show value in the services you so sell.”
Shaw [TSX: SJR.B] plans to offer Wi-Fi service to its huge cable subscribers who, like many people, have Wi-Fi-enabled laptops, smart phones or tablets. It’s a model many U.S. cable companies use, although it isn’t clear yet if Shaw will offer wireless free as they do.
But Dobbin envisions Shaw offering free home and city-wide Wi-Fi service to cable customers, which would encourage them to use their mobile devices anywhere.
“All you need is a Mobilicity handset and you’ve got your bundle,” he added.
Not facing Shaw won’t be an advantage to his company, Dobbin said, because the real competition comes from incumbents BCE Inc.’s Bell Mobility, Telus Corp. and Rogers Communications, who together still have over 90 per cent of the market.
Lacavera, on the other hand, said not having to face Shaw will be positive for Wind Mobile and for Telus.
He understands why Shaw said the economics for another new entrant getting into wireless doesn’t make sense at this time. “They’re late to the game already,” he said. “They missed the window they had.”
But he is puzzled by the Wi-Fi strategy. “It don’t think Wi-Fi is a good move. Their announcement was a bit of smoke and mirrors. The fact is they’re withdrawing from wireless. Wi-Fi hotspots are not a replacement for an LTE [cellular] network.”
“There’s no way Shaw will be able to put a competitive [wireless] product out that Telus and Wind can’t stomp all over,” he added.
A Telus [TSX: T, T.A; NYSE: TU] spokesman said the company has no comment on Shaw's plans.