Shaw drops "price bomb" on fibre competitor

Shaw has dropped a "price bomb" on Novus Entertainment, a small cable operator in Vancouver, BC. Novus is offering fibre-to-the-home in some residential buildings in the city. In response, Shaw is offering those customers 15Mbps service with a 100GB cap for $9.95, 200 channels of TV service (with 25 high-definition channels) for $9.95, or digital phone service with free installation, also for $9.95 a month. Other Shaw customers are not eligible for the offer, so Novus has launched 10BucksToo.com in response along with action at the BC Supreme Court and the Competition Bureau.

Michael Geist is a law professor and the Canada Research Chair in Internet and e-commerce law at the University of Ottawa.

Comments

5 Comments

outraged Shaw customer

Aug 6, 2009 at 3:13pm

So if Peter Bissonnette (Shaw’s president's)quote is TRUTHFUL(from business in Vancouver article) we should all feel ripped off. Peter is quoted as saying "that Shaw’s pricing is not below-cost". If this is the case then their mark up is astronomical. After doing the math on this offer, it works out to $24.87/month, after factoring in the 2 months free, for all 3 services from Shaw. Now after this promo is done and you pay their regular rates, you would now be paying around $240.00/month!!!!!! That works out to approximately a 1000% MARK-UP!!!!!!!!
This is what I call GOUGING your customers. I am appalled at this. No company should be allowed to have these kind of mark-ups. This is why they want Novus gone. No competition = 1000% mark-up.

Repeater

Aug 8, 2009 at 9:26am

Since "outraged Shaw customer" posts the exact same post everywhere, you better believe he works for either 6s Marketing or Novus...

So, let's play cut and paste!!

What Novus failed to mention is that they offered everyone in their areas $9.95 internet/cable to switch to them, and as Peter Bisonette mentions has been very unwilling to allow others into the building they've run fiber to. That is LITERALLY a "barrier to entry" into the market for Telus, Shaw, etc, wouldn't you say?

Costs to maintain the services to 50-200 units in a single building are drastically different than providing them to 50-200 houses, and pricing is different. MDUs (multi-dwelling-units) are a highly competitive space, and pricing is different accordingly.

While Shaw is clearly flexing its muscles here, it's in response to Novus acting like a "big boy" itself, and duely being treated like one. What do you think Shaw, Telus, and Rogers do to each other every day of the week? Novus brought it upon itself.

And every customer in those buildings wins. Remember, those are real people saving real money. If you want the same deal, you can move into an MDU too!

Market at work, nothing more. Welcome to the big leagues Novus, you finally made it. =)

INFORMED CONSUMER

Aug 9, 2009 at 10:18am

Hey Repeater- I think it’s time to stop the inaccurate postings from you and the other Shaw employee’s posting here and on other message boards. I say this because ANYONE that agrees with what Shaw are doing have been either extremely MISINFORMED or are associated with Shaw in some regard. So I may do a little “cut and paste!” myself. As for your misguided notion that there is a "barrier to entry' into the market for Telus, Shaw, etc" guess again. It was only SHAW that complained to the CRTC at which point their complaint was DENIED. So you think it’s unfair for Novus to have an advantage in 1% of the new buildings in Vancouver whereas Shaw has the advantage in the other 99%. I can see how this is VERY UNFAIR to Shaw and annoys you so. This is a moot point as Shaw gains access shortly after Concord turns the building over. Therefore there is no "barrier to entry".

And yes you’re correct in that “every customer in those buildings wins”, but you fail to mention that this is a win for only 1 year. After that year they are back to Shaw’s 1000% mark-up as Shaw will have successfully eliminated the competition. And no, Telus is not a viable competitor at this time as both their TV and Internet services are inferior to both Novus and Shaw. I now give you a “cut and paste” from a posting I found elsewhere.

“WHEN ONE COMPANY (SHAW) with a subscriber base of more than 2 million, OFFERS and OFFERS and OFFERS EVERY SINGLE CUSTOMER of another MUCH SMALLER company’s (Novus) client base and ONLY THEM a promo of this magnitude it can only be construed in one way. It is called predatory pricing with the sole purpose of putting the other company out of business. THIS IS WHAT THE PROBLEM WAS ALL ABOUT.”

You will now accuse me of being either a Novus or 6s employee of which I am not. I am simply an INFORMED CONSUMER that would like to get the FACTS correct. If this doesn’t paint a nice picture of Shaw, then so be it. They are the ones that have created this.
And yes “the truth is out there” it’s just not coming from you!!

Norman

Jun 21, 2010 at 6:51am

I have only this to say: after Shaw raised prices twice in one year, I will NEVER deal with them again.

Geffen

Oct 3, 2010 at 2:09pm

Quit Shaw a year ago for 'funny' billings & its' limited service. Ended up in a fry-pan situation w/Telus - being left with an inoperable & their apparently irreplaceable remote. Picture w/Telus better than Shaw - but their internet is on-& off again available. One is as bad as the other-gf