UPDATE 1-Telus shares sunk by rival Shaw's move on Wind

(Adds Telus comment, details; updates share prices to close)
By Alastair Sharp
TORONTO, Dec 17 (Reuters) - Telus Corp T.TO fellstock
fell to its lowest since early 2014 on Thursday, after
competitor cable company Shaw Communications Inc SJRb.TO
surprised its main rival with an offer to buy wireless operator
Wind Mobile on Wednesday.
Analysts cheered Shaw's move, which would give Wind more
financial heft to expand and improve its network and provide
Shaw with an established wireless product to bundle with its
Internet, television and landline services.
"For Shaw, what was attractive was not having to go through
the initial stages of building a greenfield network and going
through the pain points of getting that up and running," said
Dave Heger, a telecommmunications sector analyst at Edward
Jones.
Telus said it was confident in its ability to compete with
Shaw in wireless, citing its lauded customer service among other
differentiating factors.
Shaw calculated in 2011 that building a wireless network in
Alberta and British Columbia would cost it at least C$2 billion.
It said on Wednesday it would pay C$1.6 billion for Wind,
which serves almost 940,000 customers in major cities in
Alberta, British Columbia and Ontario. Three-quarters of its
customers are in Eastern Canada.
Shaw stock also fell though as investors calculated the
company would take an initial hit by acquiring loss-making Wind
and could dilute the value of existing shares by using an equity
offering to finance the deal.
A consumated deal would close a seven-year chapter in which
independent wireless operators were encouraged by the former
Conservative government to challenge three national wireless
players: Telus, Rogers Communications Inc RCIb.TO and BCE Inc
BCE.TO .
Existing regional operators Quebecor QBRb.TO and Eastlink
added wireless in that process too, while Shaw also bought
spectrum before reversing course.
Of Wind's fellow independents who first acquired spectrum in
2008, Rogers bought Mobilicity out of creditor protection in
June and Telus acquired Public Mobile in 2013.
While all three sought customers by undercutting on price,
Wind has since moved to attract higher-value customers while
still playing up the simplicity of its unlimited call, text and
data plans.
"We expect Wind under Shaw's ownership to remain a
disciplined fourth wireless player with a focus on balancing
growth and profitability," RBC analyst Drew McReynolds wrote in
a note.
Telus ended the day down 6.7 percent at C$37.92 and Shaw
lost 7.7 percent to C$24.90. Canada's wireless leader Rogers
shed 5.6 percent to C$47.45 and BCE Inc fell 2.4 percent to
C$53.52.
($1 = 1.3928 Canadian dollars)