Shaw Digital Phone Well Received

Shaw Communications is accelerating its plans to push into the telephone market, which got off to a strong start earlier this year in the key cities of Calgary and Edmonton, chairman J.R. Shaw told analysts Friday.

Mr. Shaw, patriarch of the family that controls the cable, satellite and Internet business, said that Shaw Digital Phone — a voice-over-Internet product — has been well-received since it was introduced in February.

In contrast to some of the other VoIP products that offer a low-priced basic service with higher-priced options, Shaw has decided to offer a premium full-service product to its customers.

“At this stage, our price point of $55 per month does not seem not appear to be a deterrent to growth,” Shaw said.

In fact, Shaw Communications has increased its capital spending plans for its 2006 financial year “to ensure we are in a strong competitive position in our major markets,” J.R. Shaw said.

“We now see Shaw Digital Phone achieving a 20-per-cent penetration of our basic customers in the next three years, versus our initial forecast of five years.”

The company's class B non-voting shares slipped 20 cents to $24.83 on the Toronto Stock Exchange. Its class A shares gained $4.50 cents to $30 at the TSX Venture Exchange, a 17-per-cent increase, but with only 300 shares traded.

On Wednesday, after stock markets closed, Shaw Communications announced it would increase its capital and net equipment spending to a range between $535-million and $545-million in its 2006 financial year.

The Calgary-based company has been helped by a strong economy in oil-rich Alberta and neighbouring British Columbia, where it has its major cable holdings.

Other senior company executives said that Shaw's capital expenditures also include spending to install equipment for new housing, particularly in Calgary, Edmonton and Fort McMurray and some parts of British Columbia.

On Thursday, Shaw Communications Inc. reported a sharp increase in quarterly profit compared with a year ago and increased its dividend.

The cable TV provider said Thursday it earned $43.3-million or 16 cents per share in its third quarter ended May 31. That compared with a profit of $24.8-million, or six cents per share, a year ago.

Quarterly service revenue increased to $559.9-million, up from $532-million.

Shaw said it will increase its annualized dividend a penny to 41 cents per class B non-voting share.

The company had 22,450 digital phone lines installed and pending at the end of the quarter, after launching Internet phone service in Calgary and Edmonton earlier this year with plans to roll it out in other markets later this year.