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| Shaw initiates predatory price war, targets select customers |
| Posted
on Wednesday, July 29, 2009 - 08:34 PM |
In a move that will anger and frustrate its more than 2.1 million customers, Shaw Communications Inc. is currently offering its entire TV line-up, including high-definition TV (HDTV), phone and high-speed Internet services to current Novus customers for $9.95 per month, each. The offer - not available to Shaw customers outside of the Novus service area - is being challenged by Novus Entertainment Inc. (Novus) at the Competition Bureau and in the BC Supreme Court.
"Shaw is abusing its dominant position in the market by offering services - which it normally makes nearly 50 per cent margins on - at a sizeable loss as a means to destroy a local competitor," said Donna Robertson, Co-President and Chief Legal Officer of Novus Entertainment Inc. "The millions of existing Shaw customers paying full price should be outraged because they're unwittingly subsidizing the costs that customers with a competitive alternate pay, which is unethical and unfair. If they don't make the offer available to everyone, current customers should call Shaw and demand the same deal."
Shaw has been targeting potential customers residing in Vancouver highrise condominiums that currently receive their dedicated broadband Internet and cable service from Novus. Shaw has been on a buying spree, taking over small cable companies, but has been unsuccessful in getting traction with Novus.
"Shaw enjoys increasing cable margins of nearly 50 per cent, which it boasts to investors is 'best-in-class' compared to other North American cable companies," said Robertson. "We believe that Shaw's targeted campaign is an attempt to eliminate Novus from the competition, which would allow Shaw to maintain its near monopoly status and raise prices for all customers whenever it sees fit"
Shaw's $9.95 monthly cable package includes two rent-free high-definition set-top boxes with PVRs, more than 200 digital channels, more than 25 high-definition channels, a movie channel package and the first two months of service for free. The $9.95 Internet and phone packages also boast the first two months free and include several premium features.
Novus provides the best Internet and most reliable cable service available. This is because Novus has invested millions in building a fibre optic network that extends directly to the highrise condominiums with
dedicated lines for cable and Internet. Other providers piggyback their services on one network, which limits their bandwidth capacity. On cable modem Internet networks, congestion slows service, particularly during peak periods.
With more than 9,000 cable and Internet customers, Novus is currently operating in approximately 220 buildings in Downtown Vancouver and Burnaby and is poised to expand into Richmond.
"Based on Shaw's actions, we can only assume that they are trying to buy our customers by gouging their own prices," said Robertson. "They're offering these services at an enormous loss, while forcing the rest of their customers to make up the difference. We aren't big enough to compete with Shaw's predatory pricing, but we are faster and more reliable, and our service is actually less expensive over the long term."
Novus is pursuing a formal complaint to the Competition Bureau and asking for a swift resolution to this matter in hopes that meaningful competition in Metro Vancouver can continue. Novus has also commenced legal proceedings in the Vancouver Registry of the Supreme Court of British Columbia.
About Novus Entertainment Inc.
Founded in 1996, Novus Entertainment Inc. is a privately owned and operated company providing high-speed Internet, cable and digital TV, and digital phone services to residents in Metro Vancouver. Novus continues to expand its fibre optic network throughout Metro Vancouver to offer customers the very best in entertainment and communications technology. The network provides truly digital service and virtually unlimited bandwidth with the capability to meet future demands, particularly for high-definition programming. Novus is currently the only company in Western Canada to offer residential Internet speeds up to 60 Mbps without the use of a modem. For more information on Novus, go to www.novusnow.ca.
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