MONTREAL – If cable companies continue on their current path of rapid voice coverage, they should be able to capture in excess of 40% of all voice access lines by year-end 2010, at more than 5 million lines, says a report being released today by Lemay-Yates & Associates.
In contrast, the ILECs stand to shed in the range of 10% of their access lines per year over the period.
The report is entitled “LYA Canadian Consumer Telecom & Cable TV Market Forecasts 2006” and takes a deep look at all the market segments including fixed voice communications, subscription TV, Internet and web services.
The report also says that non-facilities VOIP services (such as Vonage and Skype) have little traction overall in the Canadian market, in spite of offering very attractive prices. Hosted VoIP service appears to be a niche market opportunity.
High-Speed Internet services "are expected to remain the bright light of penetration and revenue growth in Canada. LYA expects that High-Speed Internet access services will be subscribed to by more than 80% of Canadian households in 2010, up from more than 50% at the start of 2006. Entertainment applications, gaming, video streaming and downloading will require increasing download speeds to provide a quality customer experience. Revenues are forecast to grow by close to 60% over the same period," says the report.
While voice grows rapidly for MSOs, telco TV is estimated to capture an overall market share of 15% of the subscription TV market by 2010. "This is much less than the total voice access lines expected to be captured by cablecos at that time. Cablecos are expected to see a decline in their subscription TV connections as telcos capture market share in that market," says the report. "If current trends continue, the Canadian residential market is headed towards an effective near duopoly structure between the incumbent telcos and cablecos, with leftovers for third parties.
“The Canadian market for fixed consumer telecommunications services has changed considerably in 2005 with the widespread entry of cablecos in the telephony market," said Johanne Lemay, co-president of LYA and primary author of the Report. “Cablecos are expected to become very significant number two service providers in a very short time frame. In just one year, Rogers is already the third largest residential telephone company in Canada. The ball is in the court of the major telcos to emulate SaskTel and MTS and add Telco TV to their bundle of services as rapidly as possible to stem the flow of subscribers migrating to the cableco offers. The first battle was won by the cablecos but the war is definitely not over.”
