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Canada - Strong wireless data revenue growth
Canada - Telecoms, Wireless, Broadband and Forecasts finds Canada's wireless industry has experienced rapid growth since its inception in 1985, driven by advances in cellular technology, the deregulation of the Canadian telecom industry and significant switching from wireline to wireless services.
Following a decade of market consolidation, in early 2011 the wireless market remained largely dominated by Rogers Wireless, Bell Mobility and TELUS Mobility. However, due to the federal government's Advanced Wireless Services auctions in 2008, the prospect of increased competition emerged as a number of new entrants prepared to establish themselves as wireless service providers across the country.
Canada currently ranks 12th in the OECD for broadband penetration, down from second place in 2002. Canada's broadband markets also continue to rank poorly in terms of prices and speeds. Nevertheless, government policy has encouraged widespread availability, particularly to rural and regional areas, such that approximately 95% of Canadians live in communities served by broadband access.
Market highlights:
During late 2010 and early 2011 four new mobile providers had launched services, namely Globalive's Wind Mobile, newly created Public Mobile, Mobilicity and finally cableco Videotron's Videotron. Meanwhile cableco Shaw Communications has stated its intention to launch wireless services in 2012.
Whilst the presence of new entrants offering largely low-cost services and handsets may not have a sizeable impact on the overall market share of the likes of Rogers, Bell and TELUS (who collectively account for around 94% of Canada's wireless market), the entry of the large cable companies such as Videotron Itee and Shaw Communications into the wireless market is more likely to pose a threat to that dominance.
In the broadband market, cable still leads DSL in terms of subscriber numbers, with DOCSIS 3.0 upgrades reigniting cable subscriber growth, whilst fibre deployments are starting to gain momentum.
Following Barrett Xplore's planned deployment of a nationwide WiMAX network complemented by a 4G satellite network, rural Canadians can look forward to faster broadband with higher bandwidth allowances.
Following a lengthy review process, in May 2011 the CRTC announced a new target for ‘basic’ broadband access across Canada. The CRTC stated that by the end of 2015 all Canadians should have access to broadband speeds of at least 5Mb/s for downloads and 1Mb/s for uploads.
Data from Canada's major operators for Q111 show that Canada's telecommunications market continues to grow at a regular pace - only fixed-line subscriber numbers are subjected to declines, Canada Telecommunications Report Q4 2011 reports. Demand for smartphones and data packages is driving growth, but operators have not neglected the lower end of the market, with Telus reviving its Clearnet brand with the launch of discounted voice and message packages in April 2011. We have not altered our forecasts this quarter, with growth in line with our expectations.
Mobile operators are investing heavily in the deployment of new, and upgrade of existing, networks to expand 4G coverage, with Bell, Rogers, Telus and SaskTel all improving 4G networks during the quarter. Videotron also joined the fray, launching its first 4G device in May 2011. But the low density of Canada's population beyond major cities is a deterrent to investment.
Canada's mobile market made the news globally with the June 2011 publication of an OCED report that shows that Canadians pay some of the highest international roaming charges in the globe. Following the study's publication, Rogers, Bell and Telus all announced plans to drop their roaming charges - Telus claimed that it had already planned to do so prior to the study's publication and has cut costs for its subscribers abroad by over 50%.
After two years of uncertainty, a Canadian court ruled in favour of Wind in May 2011 regarding concerns over whether or not it meets Canadian regulations concerning the foreign ownership of telecoms companies operating in the country. While Canadians have majority ownership, Egyptian firm Orascom Telecom controls the operator, and if a Federal Court had overturned the original licence, it would have been forced to apply for a new one from the Canadian Radio-television and Telecommunications Commission (CRTC). Public Mobile, its rival, announced it will appeal against the Federal Court's ruling. Following the re-election of the conservative government (but this time, with majority rule), in May 2011, Canadian's new Minister of Industry Christian Paradis commented that he will address the issue of foreign ownership of telecoms and that it is a 'priority'. The problem of foreign ownership is not over for Wind, as it requires investment to fund its expansion plans, and there are few potential investors in Canada.
The new government has also seen the issue of spectrum auctions, for bandwidth in both the 700MHz and 2.5GHz spectrums, expected in 2012. Smaller mobile operators are keen to gain a share of spectrum and are calling for limits to be placed on the incumbents.
In regulatory news, the CRTC introduced new rules that will make it easier for customers to change mobile phone, internet or pay TV providers. Under the new regulations, any changes should be implemented within two business days.