This Canadian Disruptor Could Rattle an Entire Industry in 2018

Shaw Communications Inc. (TSX:SJR.B)(NYSE:SJR) and its disruptive wireless business will cause a huge disruption to the Big Three incumbents. Here’s why now is the time to load up on shares.

| More on:

Investors who can spot industry disruptors early in the game could find themselves profiting big time as the disruptor shakes up the industry it operates in, causing competitors to scramble to retain market share. You’re probably very familiar with Amazon.com, Inc. and its disruption in the retail world. Jim Cramer, the host of Mad Money, recently referred to Amazon as the “death star” because of its ability to destroy a huge chunk of its competitors.

I believe there’s another “death star” that’s set to shake up a Canadian industry, which has enjoyed favourable conditions for far too long. The general public hasn’t really given this company the respect it deserves as a potential disruptor, but as it starts wreaking havoc in its industry, I think investors will start to take notice and its shares will start to take off.

I’m talking about Freedom Mobile, the wireless business of Shaw Communications Inc. (TSX:SJR.B)(NYSE:SJR) and its potential to shake up the Canadian telecom industry. The company has been spending a great deal in wireless infrastructure upgrades since Shaw purchased and renamed WIND Mobile to Freedom earlier in the year.

As a new competitor in the wireless space, regulators may give Freedom Mobile first dibs at spectrum auctions, which will accelerate the imminent disruption that Freedom will cause on the Canadian wireless scene. The 600 MHz band spectrum auction is underway, which will improve reception in tough locations like underground areas or within thick concrete buildings.

The AWS-3 (Band 66) network is one of the most advanced LTE networks out there, and it’s been confirmed that Apple Inc.’s iPhone 8/8 plus and X will be compatible with this network. That means iPhones are indeed coming to Freedom Mobile likely in 2018, and may be the cheapest option for Canadians to get their hands on the best iPhones yet.

Freedom Mobile is able to offer much cheaper plans than its peers, and as its network continues to strengthen, management has made it clear that it wishes to continue to remain a cheaper wireless provider. One of the biggest disadvantages that Freedom Mobile has had is its lack of iPhone support, but this is going to change very soon.

Given that all of Freedom Mobile’s current offerings have the option for $0 upfront with select two-year plans, it’s likely we will see the new iPhones being offered at a $0 down price point as well. That’s an offer that’s too good to pass on for most Canadians, and I think the release of iPhones (likely in 2018) at Freedom Mobile will be a major driver of subscriber growth at the expense of the Big Three incumbents.

If you’re looking for a high dividend yield (currently at ~4.2%) and the potential for next-level capital gains, I’d back up the truck and load up on shares of Shaw today before the Big Three incumbents start to experience subscriber losses after Freedom Mobile expands its device offerings.

Stay hungry. Stay Foolish.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Joey Frenette owns shares of Shaw Communications Inc. and Apple Inc. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. David Gardner owns shares of Amazon and Apple. The Motley Fool owns shares of Amazon and Apple and has the following options: long January 2020 $150 calls on Apple and short January 2020 $155 calls on Apple.

More on Dividend Stocks

hand stacks coins
Dividend Stocks

This 7.7 Percent Dividend Stock Pays Cash Every Single Month

This TSX income stock has been paying above-average yields for decades now.

Read more »

investment research
Dividend Stocks

Best Stock to Buy Right Now: TD Bank vs Manulife Financial?

TD and Manulife can both be interesting stock picks for today, depending on your investment style.

Read more »

A worker gives a business presentation.
Dividend Stocks

2 Dividend Stocks to Double Up on Right Now

These stocks are out of favour but could deliver nice returns over the coming years.

Read more »

Man holds Canadian dollars in differing amounts
Dividend Stocks

This 5.5 Percent Dividend Stock Pays Cash Every Month

This defensive retail REIT could be your ticket to high monthly income.

Read more »

Confused person shrugging
Dividend Stocks

Passive Income: How Much Do You Need to Invest to Make $600 Per Month?

Do you want passive income coming in every single month? Here's how to make it and a top dividend ETF…

Read more »

Canadian Dollars bills
Dividend Stocks

3 Monthly-Paying Dividend Stocks to Boost Your Passive Income

Given their healthy cash flows and high yields, these three monthly-paying dividend stocks could boost your passive income.

Read more »

Make a choice, path to success, sign
Dividend Stocks

The TFSA Blueprint to Generate $3,695.48 in Yearly Passive Income

The blueprint to generate yearly passive income in a TFSA is to maximize the contribution limits.

Read more »

hand stacks coins
Dividend Stocks

3 Ultra-High-Yield Dividend Stocks You Can Buy and Hold for a Decade

These three high-yield dividend stocks still have some work to do, but each are in steady areas that are only…

Read more »