TORONTO – More Canadians are dropping their home telephone lines and TV subscriptions, according to a new report from Toronto’s Convergence Consulting.
Canadian telco residential wireline telephone line loss was 7.4% in 2011 (up from 6.9% in 2010) and the research company forecasts 7.8% for 2012 and 8.5% for 2013. The report, part of the company’s “The Battle for the North American Couch Potato” series, estimates wireless substitution was responsible for more than half (53%) of last year’s loss, up from 37% in 2010.
“We estimate Canadian wireless-only households at 14.8% YE2011, and forecast 18.1% YE2012 and 21.6% YE2013 (YE is year-end). Cable represented 35% of residential wireline telephone subs YE2011, up from 31.7% YE2010, and we forecast 38.3% YE2012,” reads the report.
The report also notes Canadian wireless service (weighted) ARPU declined 0.9% in 2011, driven by an 10% drop in voice ARPU. Based on data’s growth, the company forecasts that ARPU will continue to recover and drop by just 0.2% in 2012. Canada's 'Big Three' wireless providers saw 34% data revenue growth in 2011. Canadian wireless subscriber smart phone penetration was 43% at the end of 2011, (up from 29% YE2010), and is forecast to top 56% YE2012.
The new wireless entrants continue to squeeze the incumbents, undercutting their combined voice/data pricing by 40%, and their data only by more than 80%. Based on its subscriber models, the report predicts that these new entrants will capture 6.5% of Canadian wireless subscribers by year-end 2012, up from 4.3% at year-end 2011.
Additions to Canadian TV subscribers dropped from 246,000 in 2010 to 222,000 in 2011, and are forecast to reach only 180,000 in 2013. Based on its ‘TV Cord Cutting Model’, (which takes into account annual subscriber additions and the digital transition), the report estimates that 0.7% (83,000) Canadian TV subscribers cut their TV subscriptions in 2011 to rely solely on on-line, Netflix, over-the-air, et al.
Cable saw its first decline in TV subscribers in 2011, a trend that the Convergence report predicts will continue. Satellite’s share is expected to drop to 23% this year, down from 24% at the end of 2011, while the telco’s TV market share is expected to grow to 11% at YE2012 from 8% at YE2011.
Cable, satellite and telco TV subscription revenue grew 5% to $8.8 billion in 2011 and by year’s end, 31% of TV subs had a personal video recorder (PVR) and 48% had high definition, with penetration driven by “highly competitive pricing (including free)”.
On the broadband side, 2011 additions were 400,000 and revenue grew 8% to $5 billion.
“We forecast Cable will maintain its 60% residential broadband subscriber market share lead against the telcos through 2014”, the report continues. “Cable, except for a few FTTH locales, offers more residential broadband speed and speed for the price than the telcos. The telcos’ ongoing residential telephone line loss creates a declining base to gain or retain broadband subs.”
Click here for more on 'The Battle for the Canadian Couch Potato: Bundling, Television, Internet, Telephone, Wireless' report.
