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Thread: Barclays surprised Shaw isn’t more aggressive with Freedom Mobile

  1. #1
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    Barclays surprised Shaw isn’t more aggressive with Freedom Mobile

    http://business.financialpost.com/fp..._lsa=f88a-434e

    Emily Jackson | April 3, 2017 3:12 PM ET

    Shaw Communications Inc.’s wireless brand Freedom Mobile didn’t offer attractive promotions as its larger competitors in the past quarter, surprising a Barclays analyst who expected the “underdog” to make the most of its lower prices to steal market share.

    “We are somewhat surprised that Freedom has not turned more aggressive in driving subscriber growth given its inherent advantage with pricing and market share,” analyst Phillip Huang wrote in a Monday note setting the stage for Shaw’s quarterly results next week.

    Shaw has been investing in LTE network upgrades after it rebranded its wireless business to Freedom to shed baggage associated with its former name, Wind Mobile. Freedom’s average revenue per user, an important industry metric, is far lower than its larger competitors since its plans and phones are cheaper, and its market share is in the low-to-mid single digits, Huang noted.
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    Yet the Big Three of Rogers Communications Inc., Telus Corp. and BCE Inc., which dominate Canada’s wireless market with approximately 90 per cent of the market, share, “dominated” promotional activities in the first few months of the year, Huang noted. All launched promos that targeted Freedom’s customers through their flanker brands Fido, Chatr, Public Mobile and Virgin.

    “We believe this has made it more difficult for Freedom to fight for share,” he wrote.

    The best promotions, however, were launched in March, which will not be reflected until Shaw’s next reporting period (its quarters end one month ahead of the Big Three).

    Still, Barclays estimates Freedom will post “relatively lackluster” subscriber additions of 24,000 compared to 27,000 at this time last year. Consensus estimates are a bit rosier at 28,000 net new subscribers.

    But for the time being, Barclays continues to view Freedom as the underdog, Huang wrote.

    Unlike Quebecor Inc.’s Videotron, the fourth player in Quebec that has moved into double-digit market share, Shaw has not gained sufficient low band spectrum to network share with Rogers, he noted.

    Until that happens, Barclays doesn’t see Freedom as “Videotron 2.0 because Shaw cannot effectively compete head-on against the Big 3 the way Videotron can.”

    The bank retained its price target of $29 for Shaw. The telco was trading at $27.72 Monday on the Toronto stock market.

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    Those are some terrible numbers for a budget phone service provider. If Public Mobile/Fido/Koodo come back with the $40 plan again, these numbers shrink even more.

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    Quote Originally Posted by ron.jace View Post
    Those are some terrible numbers for a budget phone service provider. If Public Mobile/Fido/Koodo come back with the $40 plan again, these numbers shrink even more.
    They just changed the brand. I am sure it added to some confusion and are upgrading the network now. Pushing through the plan discounts is not a good idea for future revenue per subscriber growth perhaps. S8 ( I already pre-ordered) and more LTE phones will change it for sure.

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    Quote Originally Posted by Doctor Andrade View Post
    They just changed the brand. I am sure it added to some confusion and are upgrading the network now. Pushing through the plan discounts is not a good idea for future revenue per subscriber growth perhaps. S8 ( I already pre-ordered) and more LTE phones will change it for sure.
    I don't think Freedom is seen any better than Wind. The issues that existed with Wind still exist with Freedom. The 3G network is still complete trash going by the comments of users on this forum. In my opinion Wind plans are over priced. People know about Wind/Freedom, they know about their service and limitation, and they aren't going to give up their current level of service to save very little or nothing.

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    They can't increase ARPU selling the same crap product as a year ago. Among my circle, I still see people leaving Freedom rather than joining. I have yet to hear from someone who said I just joined, the service is great, wish I had switched earlier.

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    What are you guys talking about? Freedom is aggressively competing......to ARPU match with the Big 3.

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    Barclays pointed out the obvious - Freedom haven't been competitive. Their new phone deal helps, but not quite there. Maybe if they gave away a free S8

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    Quote Originally Posted by kwandar View Post
    Barclays pointed out the obvious - Freedom haven't been competitive. Their new phone deal helps, but not quite there. Maybe if they gave away a free S8
    Now that the free MyTab option is gone, any new phone promos will require a new MyTab with an additional monthly payment of anywhere from $5 to $35.

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    Quote Originally Posted by phoneseeker101 View Post
    ...any new phone promos will require a new MyTab with an additional monthly payment of anywhere from $5 to $35.
    That's right, you pay for your phone.
    Freedom finances your purchase, interest free, you choose the terms. Or you buy it outright.
    How it should be.

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    Quote Originally Posted by pjw918 View Post
    That's right, you pay for your phone.
    Freedom finances your purchase, interest free, you choose the terms. Or you buy it outright.
    How it should be.
    Some people still want deep phone discounts (like one of the posters above), I'm just pointing out that the days for a free lunch are gone. Freedom used to offer extra myTab discounts without additional monthly payments but now that will change.

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    There's no compelling reason to stay with Freedom. Look at the most vocal fan of the WIND and where they are, no longer with Freedom.
    All comments are my own opinion and do not reflect the views of my employer or affiliated groups.

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