CALGARY — Western Canadian cable and Internet supplier Shaw Communications Inc. (TSX:SJR.B) says its digital cable business will thrive during the recession, as consumers opt to stay in over going out for entertainment.
Shaw said Wednesday it added a record 100,000 new digital subscribers during the second quarter, and that its on-demand movie rental and high-definition TV services helped boost total subscriber numbers to one million.
“We believe customers are making a conscious decision to spend more of their entertainment expenditures on in-the-home alternatives, and this bodes well for our digital TV business,” said CEO Jim Shaw on a conference call with analysts.
“Digital represents a tremendous growth opportunity for us.”
Earlier Wednesday, Shaw reported fiscal second quarter profits of $156.2 million, down from a year-earlier $299 million, when the company enjoyed a $188-million tax recovery.
The profits amount to 36 cents per share versus 69 cents per share a year ago.
Stripped of one-time items, profits would have been $128 million in the most recent quarter, up from $113 in the 2008 quarter.
Revenues were up 10 per cent to $839 million.
Shaw, Canada’s second-biggest cable TV operator, which has more than 10,000 employees, said basic cable subscribers increased by 4,273 during the quarter. Meanwhile, the number of Internet customers rose by 26,130 and digital phone lines by 50,848.
On the conference call, Jim Shaw reiterated his company’s plans to steer clear of the wireless industry for now, even though it has been sitting on 20 megahertz of wireless spectrum it bought from the federal government a year ago for $190 million.
“We have not seen a compelling reason to get in there. I don’t think we were wrong in buying the spectrum. I think we were totally right,” Shaw said.
“We think that the wireless numbers for all of the companies are going to come off the sheet. It’s going to be weak. There’s a lot of problems with wireless. There’s a lot of price competition.”
Ottawa auctioned off a chunk of its wireless airwaves last May with the intent of fostering more competition within the sector, which is currently dominated by Rogers Communications Inc.(TSX:CIA), Bell Canada (TSX:BCE) and Telus Corp. (TSX:T).