Shaw enters wireless market with closing of Wind Mobile deal

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Shaw Communications Inc. is officially a player in Canada's wireless market, after announcing it has closed its $1.6-billion acquisition of Wind Mobile Corp. on Tuesday.

The Calgary-based cable operator now has an immediate foothold in the fierce competition for wireless subscribers, as it adds Wind's 940,000 customers in Ontario, British Columbia and Alberta. To be truly competitive, Shaw will need to invest to upgrade Wind's network to the LTE standard offered by its Big Three competitors – Telus Corp., BCE Inc. and Rogers Communications Inc.

When the deal was first announced in December, Shaw's chief executive officer, Brad Shaw, called a wireless business "a missing piece" of the company's strategy to compete with its main rival Telus. Shaw plans to work on integrating Wind's cellular network with the 75,000 WiFi hotspots it has built in Western Canada.

"With the transformative power of this transaction, Shaw will become a leading pure-play connectivity provider," Mr. Shaw said in a statement on Tuesday.

Shaw has made another transformative move that is still pending, however – namely, the sale of its media business to Corus Entertainment Inc. for $2.65-billion. That transaction still needs approval from minority shareholders at a March 9 vote, and from the Canadian Radio-television and Telecommunications Commission (CRTC).

Shaw intends to use proceeds from the Corus sale, in which it will receive $1.85-billion in cash and 71 million Corus class B shares, to fund its purchase of Wind from Mid-Bowline Group Corp. But a private equity firm, Catalyst Capital Group Inc., has been waging a campaign against Corus's proposal, urging shareholders to vote it down.

Should the Shaw-Corus transaction close, Shaw Communications says it will embark on a new path that focuses more squarely on selling customers access to broadband data, whether through a cable or wireless connection.