June 13, 2017 3:40 pm

Shaw’s Freedom Mobile gets more spectrum: Cheaper cell plans coming?

Shaw's spectrum purchase will boost service for Freedom Mobile customers and increase competition in Canada's wireless mobile market.

Getty Imahes
A A

Shaw Communications plans to buy $430 million worth of spectrum licences in British Columbia, Alberta, and southern Ontario from Quebecor.

Funding for the purchase will come largely from the $2.3 billion sale of Shaw’s U.S.-based computer centre operator, ViaWest, which the company also announced Tuesday.

Story continues below

Calgary-based Shaw became Canada’s fourth-largest wireless network operator last year with the purchase of Wind Mobile, now called Freedom Mobile. (The Shaw family controls both Shaw Communications and Corus Entertainment, the parent company of Global News.)

READ MORE: Shaw completes deal for Wind Mobile

In addition to adding spectrum, Shaw said it will spend another $350 million to bolster its wireless business.

Could this mean Canadians, who pay some of the world’s highest cellphone bills, are about to get a break?

Move is a ‘step forward’ for consumers

Added wireless spectrum strengthens Freedom Mobile’s offering in the three provinces where the licenses apply, said David Christopher of Open Media. The purchase should enable Shaw to provide better cell reception indoors and in built-up areas, as well as more reliable data connections, he added.

Still, the news is more of a “step forward” for consumers rather than a game changer, Christopher told Global News.

READ MORE: Shaw purchase of WIND Mobile should benefit consumers, experts say

Marc-David Seidel of the Sauder School of Business at the University of British Columbia agrees. Shaw’s wireless infrastructure remains much smaller than that of BCE (Bell), Rogers Communications, and Telus Corp., he noted.

Building up those antennas and cell towers is going to be “a slow process,” he said.

Even in large urban centres, where low-cost wireless providers generally have the largest footprint, installing antennas requires chasing real estate and legal permits, which means progress is going to be gradual, he added.

That’s been a challenge for low-cost providers in Canada for years.

READ MORE: ‘Surge’ in cellphone costs prompts tough choices for consumers

When it comes to cellphone towers, Canada remains an oligopoly, with Bell, Rogers and Telus owning the vast majority of the infrastructure, said Seidel.

That’s part of the reason why cheaper plans remain largely niche offerings for cost-conscious and mainly urban consumers.

Though competition has increased in recent years, most Canadians remain locked into the traditional, expensive plans, according to Seidel.

READ MORE: What’s the best, cheapest cellphone plan in Canada?

Canadians pay around $96 a month on average for a plan offering unlimited talk and texting and 5GB of data, compared to $42 a month in the U.K., according to the latest international price comparison commissioned by the Canadian Radio-television and Telecommunications Commission (CRTC), Canada’s telecommunications regulator.

WATCH: Shaw Communications CEO Brad Shaw spoke with Global’s Gord Gillies regarding Shaw’s blockbuster acquisition of WIND Mobile.

Wireless calling is also improving low-cost service

Still, Freedom Mobile and other low-cost providers are also making inroads by relying on Wi-Fi calling, which seamlessly switches service between cellular and Wi-Fi when the latter is available.

Especially in Western Canada, Shaw is relying on its cable business to provide complimentary Wi-Fi hotspots for Freedom Mobile customers, “which dramatically improves indoor access,” said Seidel.

In sum, cellphone plans aren’t about to get cheaper across the board. But Canadians looking to slash their monthly bill are getting more options.

– With files from the Canadian Press

© 2017 Global News, a division of Corus Entertainment Inc.

Report an error

Comments

Want to discuss? Please read our Commenting Policy first.

Global News