OTTAWA-GATINEAU – Canadian cable companies hold a slight lead in the broadband race among consumers.
According to CRTC figures released today, 51% of Canadian homes are wired to a broadband Internet connection and of those homes 54% are served by cable companies (a total of 64% of Canadian homes subscribe to some kind of Internet connection, which shows the continued decline in dialup, not to mention the fact that well over one-third of Canadians still don’t have an Internet connection at all in their homes).
The Commission’s sixth annual Telecom Monitoring Report reveals that the growing impact from the development and adoption of new technologies reduces costs and enables the delivery of traditional services by non-traditional service providers such as MSOs, which have leveraged their high speed Internet capabilities to include local telephony. "The telecommunications sector is evolving rapidly as we move towards increased reliance on market forces," said CRTC chairman Charles Dalfen in the release. "Monitoring the latest developments in the industry is of vital importance in carrying out our mandate."
Of course, the wireless market continued to display strong growth and remained competitive as revenues grew by 16.2%, from $9.5 billion in 2004 to $11 billion in 2005, making wireless the largest and fastest growing sector in the telecommunications market.
Total telecommunications service revenues increased by 3.5% while competitors’ share of these revenues increased to 35%. The vast majority of the increase in telecommunications revenues is attributable to the revenue growth of high-speed Internet and wireless services, says the report.
The telecommunications industry’s earnings before interest, taxes, depreciation and amortization (EBITDA) rose from $11.5 billion in 2004 to $12.4 billion in 2005, an 8% increase, while capital expenditures went from $5.7 billion in 2004 to $5.6 billion in 2005.
In 11 residential and 31 business local markets, as defined by the Commission in its local forbearance decision, competitors had over 10% of the lines in each of these markets.
The local and access sector is now the second-largest in the telecommunications market, accounting for 28% of total industry revenues, says the report. In the residential market, competitors’ line share increased from 3.3% in 2004 to 7.6% in 2005, while in the business market competitors’ line share increased from 12.8% in 2004 to 14% in 2005.
In the long distance market, revenues continued to decline, decreasing from $5.6 billion in 2004 to $5.1 billion in 2005, an 8.6% decline. In the residential market, competitors had 28% of long distance revenues. In the business market, competitors had 44% of revenues.
The Internet market continued to have strong growth and remained competitive. Internet revenues increased from $4.2 billion in 2004 to $4.5 billion in 2005, an 8.8% increase. Broadband deployment continued to progress, with approximately 92% of Canadian households passed by broadband services.
In the data and private line market, total revenues decreased from $4.4 billion in 2004 to $4.1 billion in 2005, a decrease of 7.2%. Competitors’ share (including incumbents’ out-of-territory operations) of the data and private line market increased from 27% in 2004 to 31% in 2005. Aggressive pricing and reduced demand continued to be major contributors to the decline in private line service revenues.
Newer data services such as Ethernet and IP-based virtual private network had revenue growth of 4% and 52% respectively.
The federal government requested in 2000 that the Commission report annually over a five-year period on the status of competition in the Canadian telecommunications industry. The last report of the series was published in October 2005; the Commission then decided to continue with its monitoring and with the publication of an annual report in order to help stakeholders keep up to date on the Canadian telecom industry.
It also got a little quicker this year, with the report’s release today, about three months earlier than 2005.
