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Shaw Communications to Focus on Comcast's X1 Technology

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Canadian telecom behemoth Shaw Communications Inc. has decided to launch an innovative voice-controlled television product in a bid to regain market share in the western parts of Canada. Notably, this innovative TV product is powered by U.S. cable MSO and media giant Comcast Corp.'s (CMCSA - Free Report) X1 technology.

Shaw Communications has been using Comcast’s technology since 2015. In Jun 2015, the company abandon its own IPTV platform development project (after writing-down CS$55 million) and instead licensed Comcast’s cloud-based X1 platform. Comcast’s web-capable X1 platform offers a hybrid IP/QAM video gateway with an advanced user interface and the ability to port third-party apps that tie into a cloud-based infrastructure. X1 is a cloud-based TV guide and includes recommended web videos as well as a new mobile application.

Shaw Communications has been persistently losing cable TV share in its core western Canadian markets to rival TELUS Corp. (TU - Free Report) . Using the powerful X1 platform, the company aims to provide its customers with an advanced seamless and connected TV experience, at home or outside. Further, the company is looking to gain from the huge scale that Comcast’s X1 platform will offer, which in turn aid it in regaining market share.

From mid-Jul 2016, Shaw Communications has been aggressively offering high-speed Internet at a competitive rate. The company recently added wireless services to its product mix through the purchase of Wind Mobile, which has been renamed Freedom Mobile.

Interestingly, Shaw Communications is the second major operator to have shown keen interest in commercially deploying X1, after Cox Communications Inc. Notably, in Dec 2016, Rogers Communications Inc. (RCI - Free Report) , the largest Canadian integrated telecom operator, planned to dump its Internet Protocol TV (IPTV) platform and adopt Comcast’s X1 video platform. Rogers Communications operates mainly in the Eastern parts of Canada.

Price Performance of Shaw Communications

Shaw Communications has managed to surpass the Zacks categorized Cable TV industry’s performance marginally in the past one year. The stock has gained 29.34% while the industry registered growth of 28.99%. The company had a tough time during the 2013-2015 time period.

The divestiture of Shaw Communications’ subsidiary Shaw Media to Corus Entertainment Inc. place it as a pure-play Canadian telecom company with a solid growth profile. Further, the company’s venture into the Canadian wireless market is likely to prove beneficial. The launch of the mobile TV platform – FreeRange TV – and its SmartWiFi and SmartSecurity Services should gain traction as well.

Further, the company is launching high-speed Internet services like WideOpen Internet 150 and entering into tie-ups to boost its cloud suite. We believe these are reasons behind the stock currently carrying a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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