Article content continued

He expects Shaw, which currently operates its wireless network under the brand Freedom Mobile, will start competing more aggressively in the next 12 months once it deploys the 700 MHz and 2500 MHz radio frequency blocks it purchased this spring for $430 million. It plans to spend an extra $350 million to deploy the spectrum.

Shaw executives have confirmed their goal is to hit 25 per cent market share, in line with the aspirations of Quebecor Inc.’s Videotron in Quebec. But Freedom Mobile has only had “lackluster” performance thus far when it comes to subscriber growth and average revenue per user, Huang noted.

“It seems to reflect management’s deliberate efforts to not appear disruptive to the incumbents before Shaw is ready,” he wrote.

As it stands, Freedom’s network overall has lower quality and speed than that of Rogers, Bell and Telus, but Huang believes the improved network will increase Freedom’s appeal beyond lower-end customers, especially since it is capable of supporting the new iPhones for the first time.

Another hint that Shaw might make moves is that it trademarked the names Shaw Mobile, Shaw Wireless and Shaw Mobility on Sept. 14, according to the Canadian Trademarks Database.

Huang was not surprised to see this and expects management to start selling iPhones within the next six months.

Still, Huang expects a “potentially bumpy ascension” for Shaw. The Big Three will likely leverage better networks and bundling to curb Shaw’s growth, he wrote. Shaw also has less experience in wireless, which increases the perception of risk.

ejackson@postmedia.com