: Novus twitters vs Shaw over 'unfair' cable TV price - TSE:SJR.B
2009-07-30, 05:41 PM
"Novus wants Shaw customers to call the company and ask for cable TV, Internet, and phone packages at C$9.95 each. Novus says Shaw is offering services to customers of Novus selectively at a loss, with a view to eliminating it as a competitor. Novus is at a disadvantage in that it is not able to match Shaw's low price."
Article can be found here:
2009-07-30, 09:40 PM
Good marketing ploy ... but I kinda raise my eyebrows at Novus portraying itself as the hard done by little guy. Concord Pacific (aka Novus) has between $5 and $7 billion dollars in Vancouver based holdings. Who knows what else the Hui family owns. Hardly the little guy in this fight ... there really isn't one.
2009-07-31, 02:24 AM
Johnny Canuck, it raises my eyebrows how pro-shaw you are over the year that i wonder if you have a financial stake in the company.
There is no marketing ploy by Novus, they are just pointing out that there is an unfair competition practice initiated by Shaw because they are only offering this offer to a select few,while taking a loss. This seems to me clearly an issue that the competition would look at. That is why a bureau was created. To stop monopolies running rampant.
Your note about how Novus (concord pacific) has land interests (and they do, big time) really is moot regarding the business (cable,tv, internet) of the matter. Just because one company does well in one area, doesn't mean they dont have a say in pointing out an unfair monopoly in another business.
Likewise, the Shaw family's oil interests in alberta have no bearing on their cable business. Not to mention whatever holdings they might have.
At the end of the day, as consumers, we should all applaud Novus' efforts, whether you are pro shaw or novus. The end result is competition, and that means cheaper prices for all of us.
2009-07-31, 11:21 AM
I have been pretty open that I am both a Shaw customer and a Shaw shareholder. I've been treated well as a customer and feel I get good value for my money. I obviously feel there is good value in Shaw shares.
Am I pro-Shaw? To a point, as above. Can I be critical of Shaw? Absolutely. I've posted negatively on audio drop-outs, HD adoption, and other issues.
I am not going to repeat things at length that I've posted elsewhere, but I don't see any problem with Shaw's tactics. If they are wrong, then it is wrong for Rogers to incent wireless customers to leave Telus, and it is wrong for Telus to offer huge winback savings to landline customers who left for Shaw, and it is wrong for VISA to offer 5.9% interest rates on balance transfers when they are providing testimony to Parliament that says they can't make money at 19% and please don't legislate limits on credit card rates. I take issue with all the whining over Shaw's loss leaders for Novus customers because if Shaw's wrong, then let's smackdown Rogers, Telus, TD, American Express, CIBC, RBC, BMO, CTVGlobemedia, Bell, Canwest, and 500 other companies that do the same thing. It is, in fact, nothing more than the competition you say you want.
As far as the complaint to the Competition Bureau goes ... that's just marketing too. It has no hope of success. The CRTC has already ruled that what Shaw is doing is legal and the Competition Bureau must defer to the CRTC on the interpretation of the regulatory scheme governing BDU's. Shaw and Novus have been suing each other and complaining to admin tribunals about each other for years. The plaintiff/complainant never wins and they continue to do so for no other reason than to annoy the other side and market how evil each other being.
I have no issue with Novus. I have no issue with most of what Novus does. I think this campaign is witty and inventive. That said, I do find their lockout practice anti-competitive, but wouldn't care if they didn't whine about Shaw responding to it by using loss leaders. What I commented on at the beginning of this thread is that I find it comical that Novus portrays itself as the "little guy" who can't compete with evil Shaw. Come on ... Novus is part of a multi-billion dollar enterprise operating with an economies of scale advantage over Shaw (and Telus) in that their complete operation happens within a 15 kilometre radius. It's not that Concord Pacific does "well" or not ... it's that Novus is suggesting that it is being beat up by the big bad schoolyard bully. These companies are on equal footing. There is no little guy.
Lastly, Shaw and MTS compete with each other vigorously in Manitoba. Shaw offers loss leaders, as does MTS, but both companies simply compete. MTS wins share from Shaw because of the value they offer and their reputation as a company. Good on them. If that's how Novus wins customers, good on them too. That's not what they do and then they cry foul when Shaw fights back. They ask their big brother to make sure they get the candy from the pinata first and to make sure that the big brother keeps all the other kids away from the pinata until their hands are full. That's not competing ... that's not competition.
As a consumer, I applaud MTS for competing with Shaw. As a consumer, I applaud Shaw for landline competition with Telus. While I will never be a Telus customer because of they way they treat customers, I do applaud their efforts to compete in TV. I have no issue with competition. But ... Novus? As above.
2009-08-02, 05:21 PM
Yes, I take all your points.
I think we can agree that competition is good for consumers as referenced and detailed really well in your post.
But about those Shaw stocks. For a cash company that has an excellent balance sheet and a virtual monopoly in its market, one would expect the stock to do much better than it is. Its spent and done with all its major expenditures when they went high speed a few years ago and seem well positioned to just sit back and reap profits. Even in a poor economy, people still stay home and watch tv and surf the internet because it is cheap. Not that its losing value, but its not really gaining either, other than a positive yield. For my money, there are plenty of stocks that are just as safe with a more highly likelihood of upside than Shaw.
Maybe the market doesn't think its product is sexy enough, i dont know.
2009-08-03, 12:23 AM
Generally, it's hard to argue with the notion that competition is a good thing for consumers. However, there are times where we are better served by monopolies, or at least oligopolies.
I'm thinking of auto insurance where the lowest premiums in Canada are in BC, Manitoba, Saskatchewan, and Quebec ... the four provinces with Crown insurers that have statutory monopolies on certain market segments. The provinces with open competition have the highest premiums (source: Consumer Association of Canada).
I do think that we are enjoying an economies of scale advantage in the pricing we get from Shaw (and Rogers, Cogeco, etc in their market areas). I think it costs us in terms of innovation and leading edge sometimes (which is of obvious appeal around here), but the vast majority of the public isn't concerned with that and is more price sensitive ... thereby probably better served by the market structure for BDU's and MDU's that we have right now.
2009-08-15, 09:18 PM
There's nothing wrong with incenting customers to leave the competition.
Where Shaw is (potentially) in violation of competition laws is in offering this deal ONLY to Novus customers (which certainly appears to be the case, try calling from a non Novus service address in Vancouver and see if you can get the deal).
Rogers, for example, can offer a deal that is intended directly competes with Telus, but they can ONLY do so if they offer the same deal to EVERYONE in the area.
By selecting only Novus service buildings and offering a service clearly under the cost to provide, they would be in violation of a number of competition laws.
Recently, for example, Telus offered an exceptionally good deal in BC that seemed targeted at winning back Shaw customers. It was reported on the news, which resulted in a flood of calls to Telus. Everyone who called, regardless of whether they were with Shaw or not, got the deal when they asked for it.
However, in this case, people in the area calling Shaw to get the same deal Novus customers are getting are being told they don't qualify, and that only Novus customers qualify.
2009-08-15, 09:31 PM
Is Shaw targeting Concord Pacific buildings with the promotion? Yes. I see nothing wrong with that. I haven't seen any evidence that Telus customers in those buildings are being turned down by Shaw for the promo. Your argument hinges on the notion that you have to be a Novus customer and I don't think that's quite the promo ... I think you need to be a non-Shaw customer in one of the target buildings. There is a difference.
I can stand to be corrected on that if there's evidence that Telus customers have been turned down as well.
I still don't think it's a breach of the Competition Act, because what Shaw is doing is legal under the regulatory system that governs this market sector.
2009-08-16, 03:34 PM
There have been NUMEROUS reports of non Novus customers in Novus served building being refused the promotion, and people next to Novus served buildings being refused as well. It's one of the driving factors behind the complaint to the competition board.
If you check the forums on CBC where the story was reported, you will see NUMEROUS cases of customers in those buildings who called Shaw to try and get the package and were outright TOLD by CSRs that it was only available to Novus customers.
2009-08-16, 04:35 PM
First, I simply never believe a thing posted in the comments section of any article on any website. I've read exactly three comments in the past year that had any value ... whether it was the CBC, the Globe and Mail, or any Canwest paper site.
However, a building that is not Concord Pacific not being eligible makes perfect sense and is perfectly reasonable. Novus isn't available in those buildings and Shaw wasn't locked out by the developer. As for whether Telus customers in Concord Pacific buildings were or weren't allowed to get the promotion, I have no evidence that you're wrong so I accept it at face value. Fair enough if it's happening.
That said, I still see nothing wrong with what Shaw is doing. Shaw is operating within the bounds of CRTC regulation. What they're doing has been deemed legal by the CRTC in published decisions. I don't care who is eligible or not. Since I'm now repeating myself on that point, I think I'll just leave it at that.
I received Shaw's offer letter today. It is a very tempting offer... I could save about $500 over the next 10 months. However I did email Novus asking if they could match the offer. I haven't heard back yet.