OTTAWA – The operating profit margin for Canada’s Internet Service Providers was 20% in 2006, up 1% from 2005, according to statistics released Monday by Statistics Canada.
Operating revenues for the industry rose 11% to $2 billion in 2006 from a year earlier, while operating expenses were up 10% to $1.6 billion, according to Statistics Canada.
Salaries, wages and benefits accounted for 29% of operating expenses, while telecommunications expenses, including leased line charges from upstream providers, accounted for 28%.
Some 77% of their operating revenues came from the provision of Internet access in 2006 – a figure unchanged from 2005.
Revenues from broadband access have increased most rapidly recently as Internet users shift to broadband services from narrowband services. Broadband access revenues increased 17% in 2006 from 2005, while revenues from the provision of narrowband declined 13%. Internet service providers earned over twice as much from broadband access as they did from narrowband access, according to the Statistics Canada report.
The Statistics Canada figures were derived from a survey of Internet Service Providers, which did not include Internet access provided by cable and wireless services. These operations fall under the broadband category.
About 60% of operating revenues came from broadband access, 14% from narrowband and 3% from other access services. The remaining 23% of operating revenues came from a range of related services, including website hosting and online advertising sales.
Statistic Canada’s survey of Internet Service Providers covers firms classified to 518111 (Internet Service Providers), under the 2002 North American Industry Classification System (NAICS). It excludes firms coded to wireless telecommunications carriers (NAICS 5172) and cable and other program distribution industry (NAICS 5175). Also, some telecommunications firms that offer Internet access services are excluded because they do not have distinct establishments related to their ISP activity.
For 2007, Statistic Canada plans to include all businesses primarily engaged in providing Internet access services will be classified to either wired telecommunications carriers, cable and other program distribution or other telecommunications.
