OTTAWA – The demand for wireless will help Canada’s telecommunications industry “remain healthy and profitable”, according to the latest Industrial Outlook by the Conference Board of Canada.
"The continued rapid rate of increase in demand for wireless services – 8% increases on a year-over-year basis – is driving growth in the telecommunications industry. However, profit levels will remain flat over the next few years, due to fierce price competition, and a slowdown in demand growth due to the economic slowdown," said Michael Burt, associate director of the Industrial Outlook.
The forecast says that an uncertain economy will help to slow demand for telecom services. In 2008 and 2009, it predicts that industry output will grow by an average of 2.3 %, its slowest pace in more than 10 years.
However, the recent auction of new wireless spectrum means that new players (like Globalive, Quebecor and others) are expected to enter regional and national markets in 2010. This will intensify price competition, but could weaken industry profitability. The forecast expects that the telecom industry will report profits of about $7 billion annually between 2008 and 2011.
The forecast was completed before recent developments in the proposed sale of Bell Canada Enterprises.
