Despite stepped up competition from rival Telus Corp., Shaw has grown profits on increased cable TV revenues, thanks to rate increases and growth.

The western Canadian cable giant, releasing its second quarter results Wednesday, saw earnings rise 20.6% to $167.3 million, against a profit of $139 million in 2010.

Revenue jumped 28.8% to $1.2 billion, against a year-earlier $929.1 million.

On the cable side, second quarter revenue rose 4.9% to $769.4 million, driven by rate increases and growth in customer base for digital phone and Internet.

During the three months to February 28, Shaw saw its overall basic cable customer base drop by 13,662 subscribers to 2.31 million consumers in all.

Shaw also faced higher promotional costs during its latest quarter to battle competition from Telus and its new Optik TV service.

“Our industry is transforming and competition in our core business continues. We have taken decisive and immediate steps to streamline our organizational structure. In this changing landscape managing costs and operating efficiently are essential,” newly-installed Shaw Communications CEO Brad Shaw, underlining recent job cuts to trim operating costs.

Shaw is also developing its broadcast division after acquiring the former Canwest Global Communications Corp.’s TV assets for $2 billion and rebranding them as Shaw Media.