Shaw bets on WiFi, drops plans for cellular service

Shaw Communications (NYSE: SJR) said it plans to build an extensive WiFi network in Canada to deliver high-speed Internet to its cable customers, dropping plans to build a cellular network.

"The economics of a conventional wireless business as a new entrant are extremely challenging," the company said in a statement Thursday, pointing to the costs of building a wireless network that could compete against established incumbents. "We believe that a more prudent approach for us is to provide a managed WiFi network that will allow our customers to extend their Shaw services beyond the home, it added.

Shaw's decision could bode well for WiFi hardware and software vendors such as BelAir Networks. The MSO, which counts 3.4 million customers in Canada, said it will build an "extensive" WiFi network. It planned to detail its plans during a conference call with analysts Thursday morning.

U.S. cable MSOs debating the merits of marketing broadband products through 4G networks compared to WiFi may pay close attention to how Shaw performs with its WiFi strategy.

In addition to allowing high-speed Internet subscribers to surf the Web on mobile devices, cable MSOs may be able to use WiFi to offer voice services to customers. Cablevision (NYSE: CVC) has said that it is studying how it could launch mobile voice services in the New York metropolitan area through a hybrid network of WiFi access points and cellular networks that it could lease from other carriers.

For more:
- see the news release

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