Mobilicity, Wind split on Shaw

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.

Dobbin is one of the few Canadian executives who has experience building what Shaw will apparently try, a large-scale Wi-Fi mesh network. The one he built for the telecom division of Toronto Hydro (bought by Cogeco Inc. in 2008) eventually covered the downtown core and had 250,000 user accounts.

The biggest problem was getting power to access points mounted on street light poles, he recalled. During the day, when the lights are off, there’s no power going to the lights that the APs can tap. The solution was a separate power line. In some cases, he said, that was expensive.

But while Dobbin feels Shaw’s move is right, a man who’s been trying to build a business from Wi-Fi hotspots isn’t so sure. In face David Perl, country manager of Vex Canada, says Shaw won’t have an easy time. “I’ve worked for AT&T wireless and T-Mobile. Everybody wanted Wi-Fi until they realized what the cost is.

“If you don’t specialize in Wi-Fi, you’re going to have a very hard time.”

Vex Canada is trying to do what Shaw wants to do – persuade businesses to offer customers free advertising-sponsored Wi-Fi. After several years Vex Canada can only count 160 hotspots. On the other hand, Shaw has its own wired network in dozens of cities and thousands of customers. It hopes to install access points on facilities it owns, plus strike deals with municipalities to put AP’s on their properities.

Still, “the announcement means nothing unless Shaw has a rock-solid [business] plan,” he said. “It’s easy to say you want thousands of locations. It’s not easy to get thousands of locations.”

But, he added, “maybe they’ll prove me wrong.”

Among the skeptics is Ron Gruia, telecom analyst at research firm Frost & Sullivan.

It “took guts” for Shaw to turn its back on cellular, he said, but he doubts a customer of the cableco who is thinking of jumping to Telus would be stopped at the offer of Wi-Fi service.

Industry analysts thought of all the new carriers that bought spectrum in 2008 – including Mobilicity and Wind — Shaw and Quebecor Inc.’s Videotron had the brightest future because of their profitable cable businesses.


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Jim Love, Chief Content Officer, IT World Canada

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Howard Solomon
Howard Solomon
Currently a freelance writer, I'm the former editor of and Computing Canada. An IT journalist since 1997, I've written for several of ITWC's sister publications including and Computer Dealer News. Before that I was a staff reporter at the Calgary Herald and the Brampton (Ont.) Daily Times. I can be reached at hsolomon [@]

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