Shaw Q2 earnings: Freedom adds 51,000 wireless subscribers, withdraws previous 2020 guidance

The carrier says it has a more cautious view of its expected performance in 2020 due to COVID-19

Shaw Communications’ Freedom Mobile added 51,000 wireless subscribers in Q2 2020, amounting to a current total of 1,767,155.

In its earnings report released on April 9th, the regional carrier elaborated on that number as 54,200 net postpaid additions and 3,200 net prepaid losses.

As for the on-going COVID-19 pandemic, Shaw says that it’s withdrawing its previously issued fiscal 2020 guidance. It notes that “pressure in commodity prices creates significant economic uncertainty with respect to forward-looking views and assumptions.”

“As we continuously monitor and adjust our operations to manage the impacts from the economic challenges related to COVID-19 and the lower commodity price environment, we now have a more cautious and prudent view of our expected performance in fiscal 2020,” Shaw Communications CEO Brad Shaw stated in the report.

As for Q2 2020, the carrier’s ABPU (average billing per unit) is $43.84, which compares to the $41.05 reported in Q2 2019. Shaw notes that the ABPU growth reflects the increased number of customers that are subscribing to higher value service plans.

The carrier’s ARPU (average revenue per unit) for the quarter is $38.45, which is an increase from the $37.82 reported in the same period a year ago.

Shaw reports a wireless churn rate of 1.57 percent, which is an increase compared to the 1.36 percent reported in Q2 2019. Churn rate is the percentage of subscribers who discontinue their subscriptions in a month.

The company notes that the increased churn rate is the result of aggressive competitive and promotional offers available in the market during the quarter, especially in December 2019.

Shaw reports wireless revenue of $302 million CAD for Q2 2020, which it says is an increase of $56 million or 22.8 percent from Q2 2019. When compared to the Q1 2020, the current quarter revenue decreased by $16 million or five percent due to lower equipment sales.

In terms of looking forward and assessing the COVID-19 situation, the company says “consumer behaviours could change materially, including the potential downward migration of services, acceleration of cord-cutting and the ability to pay their bills, due to the challenging economic situation.”

Shaw is one of the first Canadian carriers to release its quarterly results amid the COVID-19 pandemic. Unsurprisingly, the carrier has had to rethink its 2020 outlook. Other regional and national carriers will likely follow with a similar plan once they release their Q2 2020 reports later this month.