While all U.S. eyes are focused on Comcast and what it might (will?) do if and when it acquires NBC Universal, a similar, albeit smaller scenario is playing out in Canada where Shaw Communications is set to become "a major player in the communications industry and television industry," according to its founder J.R. Shaw.
While pocket change compared to the $13.75 billion Comcast will put up for NBCU, Shaw has spent nearly $2 billion to acquire CanWest Global's specialty TV operations in a signature move in an increasingly competitive Canadian telecommunications market. The money bought Shaw such cable channels as History TV, HGTV, Showcase Diva and the Food Network and made it a video entertainment player as well as pipe in its battle with Telus and its IPTV operations. Besides the entertainment package, Shaw also plans to become a mobile wireless provider next year.
"The jury remains out on whether content will prove to be a game winner for Shaw and the cost of their new wireless business will undoubtedly constrain dividend growth," wrote Gavin Graham, director of investments for BMO Asset Management in The Income Investor. "But Shaw's track record in building and operating its business commands respect and deserves the benefit of the doubt from investors."
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