A woman walks past a Freedom Mobile store in Toronto on Nov. 24, 2016.Nathan Denette/The Canadian Press
Shaw Communications Inc. has reopened most of its Freedom Mobile stores as pandemic shutdowns have lifted, but customers aren’t flooding in to buy mobile phones and services, the company’s CEO said Friday.
“While the majority of our wireless retail network is now open for business, customer activity and store traffic has not yet returned to pre-COVID levels and it is difficult to determine when customers’ typical shopping habits will reemerge,” Brad Shaw said during a conference call to discuss the company’s third-quarter results.
Temporarily shuttering roughly 90 per cent of its stores dampened wireless sales activity for Freedom, which lost 5,500 net subscribers during the three-month period ended May 31.
Although Freedom added 2,200 net new postpaid subscribers, the additions were offset by a net loss of 7,700 prepaid subscribers. (Postpaid subscribers are billed at the end of the month for the services they used, versus prepaid customers who pay upfront for wireless services.)
Revenue from providing wireless services grew 17 per cent to $206-million as more customers signed up for Freedom’s “Big Gig” plan, which reduces customers’ download speeds instead of charging overage fees when they hit their data caps. That helped push average billing per user (ABPU) up 5.7 per cent from a year ago to $44.27, even as travel restrictions decreased roaming revenues.
The company also saw a net loss of 5,021 internet subscribers and 26,458 cable TV customers during the quarter. (The figures include both residential and business subscribers.)
Shaw also increased its provision for bad debt by $5-million owing to rising unemployment levels and impacts on its business customers, as some companies – especially those in the hospitality and resource sectors – temporarily suspended or cancelled their accounts.
Shaw Business, which primarily serves small and medium-sized companies, reported $140-million in revenue during the third quarter, in line with the same period last year and down 2.8 per cent from the previous quarter.
“We are optimistic that as the economy continues to reopen, we are well positioned to accelerate Shaw Business growth,” said Mr. Shaw.
Third-quarter net income declined nearly 19 per cent to $184-million, from $227-million a year ago, primarily owing to higher income-tax expenses. Quarterly revenue totalled $1.31-billion, down 0.8 per cent from the same quarter last year.
Desjardins analyst Maher Yaghi called the results encouraging.
“The dire economic environment has had a modest impact on the company thus far,” Mr. Yaghi said in a note to clients. Shaw is likely to be less impacted by lower roaming revenues stemming from travel restrictions than some of its wireless competitors, Mr. Yaghi added.
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