Canadian telco picks Wi-Fi over cellular for mobile broadband rollout

Stuart Corner
Friday, 02 September 2011 17:47

IT Industry - Strategy

Canadian fixed network telco, Shaw Communications, has abandoned plans to build a cellular network in favour of a WiFi rollout - demonstrating the increasing potential of the technology to be a viable alternative to cellular.

Shaw paid $C180m for cellular spectrum in 2008 and has been gearing up to rollout a network for the past three years, according to Canada's Globe & Mail newspaper. However on 1 September the company issued a statement saying that after completing "a thorough strategic review of the wireless business opportunity'¦We believe that a more prudent approach for us is to provide a managed Wi-Fi network that will allow our customers to extend their Shaw services beyond the home. This will achieve our objectives without risking well over $1 billion in capital expenditures on a traditional wireless network build."

It added: "When we first started looking at the wireless opportunity we saw wireless as a complementary product in a world where broadband Internet access is moving increasingly to wireless devices (smartphones, tablets, laptops, netbooks, etc). A wireless offering could give us a platform to extend our services and leverage our broadband, video, voice and content/programming businesses."

According to the Globe &Mail "The startling retreat is the first major move by chief executive officer Brad Shaw, and erases three years of preparations by the company to enter the wireless business under his older brother Jim Shaw - who departed late last year as Shaw's CEO."

It said: "Shaw plans to exploit its dense network of fibre optic cables crisscrossing Western Canada, erecting WiFi hot spots in businesses, shopping centres, downtown rail lines and heavily trafficked areas of cities such as Vancouver and Calgary."

Shaw's announcement spelt out the company's rationale behind the decision. "As a wireless broadband technology Wi-Fi is evolving rapidly with significant improvements in throughput, coverage and reliability. Wi-Fi technologies are now capable of providing seamless hand-off and extensive metropolitan area coverage.

"Wi-Fi is in virtually all portable consumer devices and customers are actively seeking Wi-Fi hot spots to reduce data costs and improve their wireless broadband experience. The vast majority of tablets sold to date are Wi-Fi only devices. Wireless broadband is increasingly viewed as a portable and nomadic service for the consumption of media rich content and video.

"Major wireless carriers worldwide are deploying Wi-Fi as means of offloading 3G/4G traffic thereby reducing network build costs, and improving capacity and coverage. We believe cable operators are uniquely positioned to take advantage of Wi-Fi.

"In addition, given that Wi-Fi spectrum is free and there are no device subsidies, we can build extensive Wi-Fi coverage at a substantially lower cost relative to a traditional wireless network and still provide our customers with an excellent broadband wireless experience."