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Canadian cable giant Shaw Communications Inc. (SJR) decided to test its super fast network that will support Internet access speed of 1 Gbps. For this, the company is all set to give trial run of its own Fiber-to-the-home (FTTH) network in Vancouver and Calgary. Shaw Communications will test its next-generation FTTH network for multiple-dwelling units, single-family homes, as well as lucrative small & midsized businesses.
Shaw Communications has already deployed high-speed DOCSIS 3.0 network in several western Canadian markets under the brand name of “Nitro Internet Service”. This technology offers 100 Mbps download speed. As of now Nitro Internet Service is the fastest Internet service available in Canada. The new FTTH network will be 10 times faster than DOCSIS 3.0. Management did not comment on whether it will continue with DOCSIS 3.0 or eventually upgrade all its subscribers to the FTTH network. 

Shaw Communications’ cable operation is currently facing increased competition. Telus Corp’s (TU - Analyst Report) entry into cable TV services has increased competitive pressure, and in our view, may cut out Shaw Communications’ market share and cap margin expansion. In the first quarter of fiscal 2010, the company lost more than 1,400 basic cable customers. In this juncture, it was necessary for the company to deploy innovative technologies in order to retain subscribers. 

Shaw Communications is trying hard to deploy on-demand online video services, popularly known as TV Everywhere service. This service basically offers broadband video service that will enable pay-TV subscribers to watch premium cable programming online over broadband networks. The company’s decision to install fiber-based network is also aimed at transforming itself from a broadcaster to a unicast service provider offering video-on-demand.

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