Shaw 2012 Annual Report Download - page 38

Shaw Communications Inc.
MANAGEMENT’S DISCUSSION AND ANALYSIS
August 31, 2012
High-speed Internet access services are principally provided through cable modem and digital
subscriber line (“DSL”) technology. Internet services through cable modem technology are
primarily provided by cable companies, although the CRTC has also authorized third-party ISPs
to access cable companies’ facilities, such as Shaw’s, to deliver high-speed Internet services.
Although operating in a competitive environment, Shaw expects that consumer demand for
Internet access services and for bandwidth-intensive applications on the Internet (including
streaming video, digital downloading and interactive gaming) will lead to continued demand for
high-speed Internet services. Shaw continues to expand the capacity of its network to handle
the anticipated increases in demand, however there can be no assurance that network capacity
will continue to meet the increasing demand of its customers.
DIGITAL PHONE
The competitors of Shaw Digital Phone include ILECs, Competitive Local Exchange Carriers
(“CLECs”), non-facilities-based Voice over Internet Protocol (“VoIP”) providers and wireless
providers. ILECs currently control the majority of the local telephone services market in Canada.
Several of such competitors have larger operational and financial resources than the Corporation
and are well established with residential customers in their respective markets. In addition,
there is an emerging trend toward households opting to rely on wireless voice services in place
of landline services such as Digital Phone. These developments may negatively affect the
business and prospects of Shaw’s Digital Phone.
INTERNET INFRASTRUCTURE
Through Shaw Business, Shaw competes with other telecommunications carriers in providing
high-speed broadband communications services (data and video transport and Internet
connectivity services) to businesses, ISPs and other telecommunications providers. The
telecommunications services industry in Canada is highly competitive, rapidly evolving and
subject to constant change. Competitors of Shaw Business include ILECs, competitive access
providers, CLECs, ISPs, private networks built by large end users and other telecommunications
companies. In addition, the development and implementation of new technologies by others
could give rise to significant competition.
SATELLITE SERVICES
In its Canadian SRDU business, Satellite Services faces competition principally from one other
operating SRDU operator in Canada. In February 2010, another company was licensed by the
CRTC to provide both DTH and SRDU services in Canada, but has not yet commenced service.
Satellite Services also faces competition from the expansion of fibre distribution systems
delivering distant US and Canadian conventional television signals into territories previously
served only by SRDU operators.
MEDIA
The OTA and Specialty television business and the advertising markets in which they operate
are highly competitive. Numerous broadcast and specialty television networks compete for
advertising revenues. The CRTC continues to grant new Specialty television licenses which
further increases competition. The Company’s ability to compete successfully depends on a
number of factors, including its ability to secure popular television programming and achieve
high distribution levels. The Company expects that competition will continue to increase and
there can be no assurance that increased competition will not have a material adverse effect on
Shaw’s results of operations.
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