TORONTO – Watch for more Canadians to dump their traditional phone and TV subscriptions, says a new report from Toronto’s Convergence Consulting.
Canadian telco residential wireline telephone line loss was 7% in 2010 (as it was in 2009) and the research company forecasts 8% for 2011 and 9% for 2012 and ‘13. The report, part of the company’s “The Battle for the North American Couch Potato” series, estimates wireless substitution was responsible for 36% of the 2010 loss and that wireless substitution will comprise 49% of the loss in 2011 and 53% in 2012.
“We estimate Canadian wireless-only households at 11% YE2010, and forecast 22% YE2013 (growth is accelerating). Cable represented 32% of residential wireline telephone subs YE2010, up from 28% YE2009, and we forecast 35% YE2011,” says the report.
The report also notes Canadian wireless service ARPU declined 1.5% in 2010, driven by an 8% drop in voice ARPU. The company also forecasts a 1.4% wireless service ARPU decline for 2011. Canada’s Big Three Wireless Providers saw 34% data revenue growth in 2010, and a 1% voice revenue decline. In 2011, it’s looking like a 27% data revenue growth and 4% voice revenue decline.
With the new wireless entrants pushing in a big way (and price-cutting by over 60% in some instances) those newbies will capture over 16% of the Canadian wireless market by YE2014 (5.4 million wireless subs), up from 2% at year-end 2010, and 6% at year-end 2011. Canada saw close to 2 million wireless additions in 2010, adds the research.
Now while Canadian TV subscriber additions in 2009-2010 went the other way (growing with some strength) and were 25% higher than 2008-2009, “based on our Canadian TV Cord Cutting Model (which takes into account the digital transition and annual subscriber additions), we estimate that 2011-2012 will see 1% of Canadian TV subscribers cut their TV subscriptions to rely solely on Online, Netflix, OTA, etc.” reads the report.
Although cable has added TV subs every year since 2004, the Convergence report says cable will see TV subscriber decline in 2011 (as well as 2012 and 2013). “We forecast telcos’ TV market share will grow from 6% YE2010 – up from 4% YE2009 – to 8% YE2011, and 13% YE2013, while satellite share will decline from 24% in 2010 to 22% in 2013.
Cable, satellite and telco TV subscription revenue grew 7% to $8.3 billion in 2010 and by year’s end, 24% of TV subs had a digital video recorder (DVR) and 37% had HD. “We forecast PVR at 34% and HD at 54% YE2012,” says the report.
On the broadband side, 2010 additions were 420,000 and the company is forecasting similar gains for 2011. 2010 residential broadband access revenue grew 8% to $4.6 billion. Another 8% growth is on tap for 2011.
“Despite telcos competitive speeds/pricing, cable continues to add more residential broadband subs per annum. We forecast cable will maintain its 60% residential broadband subscriber market share lead against the telcos through 2013. The telcos’ ongoing residential telephone line loss creates a declining base to gain or retain broadband subs,” reads the report.
The report is part of the company’s “The Battle for the North American Couch Potato” series. Click here for more.
