Independent 5-year Telecom Industry Forecasts for Canada

Canada’s telecommunications market continues to grow slowly but steadily, according to full-year data for 2010 with fixed-line subscriber numbers being the only exception to this rule. Despite increased demand for smartphones and increased revenue from data services, BMI has not raised its forecasts as real growth for the telecommunications sector relies on the deployment of new technologies and fibreoptic cables. Considering that much of Canada’s population is dispersed, this is an expense that operators might not be prepared to assume. Network sharing agreements, such as the one signed between Telus and Public Mobile in March 2011, is one way to keep costs low.  

However, there have been developments in technology over the past quarter, with several operators conducting trials for 3G+ technology including Rogers, Wind Mobile and SaskTel. In its Q410 results Rogers revealed it activated and upgraded more smartphones during the quarter than ever before – about 635,000 handsets compared to 400,000 in Q409 – which gives an idea of the extent of demand.  

Wind has come under the spotlight as questions have been raised over whether it not it meets regulations regarding the foreign ownership of telecoms companies operating in Canada. While Canadians have majority ownership, Egyptian firm Orascom Telecom controls the operator, and if a Federal Court overturns the decision to grant Wind Mobile its licence, it could be forced to apply to the CRTC for a new licence. The hearing is set for May 2011.  

The prospect of a spectrum auction, which has been postponed until 2012, has generated considerable debate between the larger and smaller telecoms operators. Smaller operators believe that part of the spectrum should be reserved for new players, while the incumbents do not believe this is necessary. The government has postponed the auction date until a decision is made over whether the revision of the rules concerning foreign ownership of mobile operators is necessary.  

In other company developments, Rogers received regulatory approval for its acquisition of Atria Networks. The operator also bought triple-play provider Compton Communications in March 2011 for an undisclosed amount. Bell also received regulatory approval for an increased stake in media firm CTV. While broadband subscriptions post low single-digit growth, it is significant operators are focusing on IPTV as a way to boost revenues. Bell’s infrastructure deployment will enable the operator to have access to 4mn IPTV-ready households by the end of 2011, and the market is a competitive one. One new entrant includes low-cost provide Colba.Net, offering IPTV and broadband bundles for CAD20 a month. Shaw also increased its Pay-TV offerings, with the launch of Plan Personalizer during March 2011.  

TABLE OF CONTENTS

Executive Summary  7
SWOT Analysis  8
Canada Mobile SWOT  8
Canada Wireline Market SWOT . 8
Canada Political SWOT  9
Canada Economic SWOT . 9
Business Environment Ratings  10
Canada  12
Table: Q211 Business Environment Ratings . 14
Industry Forecast Scenario . 15
Mobile  15
Table: Telecoms Sector – Mobile – Historical Data & Forecasts  15
Fixed Line  17
Table: Telecoms Sector – Fixed Line – Historical Data & Forecasts  17
Internet  18
Table: Telecoms Sector – Internet – Historical Data & Forecasts  18
Market Data Analysis  20
Mobile  20
Market Shares . 23
Table: Canada Mobile Market, Q410 . 24
Net Additions  24
Table: Canada Mobile Market Net Additions, Q210-Q410 . 24
Subscriber Mix  26
ARPU & MOU  27
Table: Blended ARPU Comparison (CAD), 2008-2010  28
3G . 30
Mobile Contract Wins . 33
Table: Mobile Contract Wins  33
Country Outlook  34
VAS Timeline  36
Table: VAS Timeline . 36
Mobile Operator Data . 38
Table: Canada Mobile Market  38
Table: Rogers Wireless . 39
Table: Bell Wireless Alliance  40
Table: TELUS Wireless. 41
Table: SaskTel Mobility  42
Table: MTS Mobility . 42
Fixed Line  43
Table: Canadian Local Voice Market – No of Subscribers . 44
Cable Operator Growth  45
Pay-TV  45
Table: CRTC Pay TV Market  46
Table: Canadian Pay TV Market – No of Subscribers  48
Pay-TV ARPU . 49
Table: CRTC Pay TV ARPU . 50
Internet  51
Table: Canadian Broadband Market, Number of Subscribers . 52
Table: High-Speed Internet Subscribers As % Of Homes With Access To High-Speed Internet, 2003-2007 . 54
Table: Wireline Developments  56
Regulatory Environment & Industry Developments . 57
Table: Division Of Regulatory Responsibilities In Canada  57
Background And Regulatory Bodies . 58
Regulatory Issues  59
Competition  59
Regulatory Developments . 59
Industry Developments . 60
Competitive Landscape  64
Market Structure . 64
Table: Key Players – Canada Telecoms Sector  64
Table: Selected Operators Financial Indicators (US$mn)  65
Company Profiles  66
Bell Canada Enterprises Inc (BCE)  66
Rogers Communications . 70
Telus . 74
Regional Telecommunications Penetration Overview . 78
Mobile . 78
Table: Regional Mobile Penetration Overview . 78
Fixed Line . 78
Table: Regional Fixed-Line Penetration Overview . 79
Internet . 80
Table: Regional Broadband Penetration Overview  80
Country Snapshot: Canada Demographic Data  81
Section 1: Population . 81
Table: Demographic Indicators, 2005-2030 . 81
Table: Rural/Urban Breakdown, 2005-2030  82
Section 2: Education And Healthcare  82
Table: Education, 2000-2003 . 82
Table: Vital Statistics, 2005-2030 . 82
Section 3: Labour Market And Spending Power  83
Table: Employment Indicators, 2001-2006 . 83
Table: Consumer Expenditure, 2000-2012 (US$) . 84
Table: Average Annual Manufacturing Wages, 2000-2012  84
Glossary Of Terms  85
Table: Glossary Of Terms . 85
BMI Methodology  86
How We Generate Our Industry Forecasts  86
Table: Key Indicators For Telecommunications Industry Forecasts  86
Telecoms Business Environment Ratings . 88
Risk/Reward Ratings Methodology . 88
Ratings System  88
Indicators  88
Table: Ratings Indicators . 89
Weighting  90
Table: Weighting Of Indicators  90
Sources . 90