Canadian cableco says no to cellular

One of Canada's biggest communications companies has turned down the opportunity to take advantage of the CDN$189 million in wireless spectrum it bought to build a new cellular network.

Instead, Shaw Communications Inc. said Thursday it will get into wireless by building a Wi-Fi network in cities across Western Canada, offering free service to its cable subscribers who own Wi-Fi enabled laptops, tablets and smart phones.

It also hopes to lease capacity to other cellular carriers looking to offload traffic onto its Wi-Fi network.

After spending CDN$2 billion earlier this year buying a national television network, Shaw looked at the numbers and said it couldn't justify the $1 billion it would take to build an LTE-based cellular network.

Shaw would have faced competition from five other cellular providers, including incumbent phone company Telus Corp., giants Rogers Communications and Bell Canada, and two startups.

"New entrants lack the economies of scale and scope to compete effectively against well established incumbents with ubiquitous coverage, extensive device ecosystems, deep spectrum positions and large retail networks," the company said in a news release. "Even with our established base and considerable strengths and assets [as a cable, Internet and VoIP provider], we could not justify a wireless network build at this time."