Executive SummaryThe telecommunications market in Canada in 2004 and 2005 has showed some signs of renewed growth after the previous year’s slowdown in revenue growth.
The mobile and broadband markets are fuelling new growth, whilst the large incumbents struggle with declining margins on legacy voice products.The impact of emerging products and services such as iTV, VoD are also beginning to make an impact on the local market.
The natural bundling of voice, Internet and TV has transformed the telecommunications and TV broadcasting industries, bringing players in both industries together as direct competitors in the triple-play market.By 2005, FttH was just starting to be more seriously considered in Canada.
While fibre services to business in metro areas have been a standard service offering by most telecom companies and ISPs operating in the Canadian business segment, deployment of FttH is still in its very early stages, with only a limited number of residential communities being connected to fibre networks.
In February 2005, Aliant announced plans to conduct Atlantic Canada’s first FttH trial during 2005.BPL is not widely used in Canada.
There have been some initial forays into the use of this technology including the implementation of BPL for high-speed internet access to a Canadian hotel chain.
Organisations, government bodies, communities and even condominiums are teaming up to build their own Next Generation Networks (NGNs) and are linking this network to the CA*net 4 network for high-speed networking capabilities.By mid 2005, different forms of VoIP service have reached the market with a variety of pricing and price packages.
The market is expected to leap in coming years as the technology evolves and becomes more familiar to consumers.
In May 2005, the CRTC reached a decision that the national incumbent phone operators, will face the same regulation for their new VoIP services as for their traditional landline voice services.
This includes incumbents TELUS and Bell Canada.As a result of Canada’s early development of a national broadband infrastructure, it is now among the leading broadband markets in the world, with the fourth highest penetration of broadband services per 100 people – behind only South Korea and Hong Kong.
By mid 2005, over 67% of Canadians who accessed the Internet from home were using a high-speed connection.
In June 2005, The Canadian Wireless Telecommunications Association (CWTA), in conjunction with a group of mobile operators comprising: Bell Mobility, Rogers Wireless, Microcell and TELUS announced the formation of an inter-carrier WiFi service alliance.There are an estimated 400+ independent ISPs operating in Canada.
The industry however, is condensing with many of the smaller providers merging or being purchased.
As competitive pressure mounts on independent ISPs, many are facing financial problems and going out of business.Video-on-demand is one of the real growth markets for iTV providers and this market will become an important source of revenue for many of the major operators by 2006.
A number of major operators such as Rogers Cable, Shaw Communications and Bell Canada Enterprises have begun to trial iTV services with their current subscribers.The Canadian broadcasting distribution industry is now firmly in transition from analogue to digital and competition is intense.
Analog broadcast transmission is not scheduled to be switched off in Canada until 85% of a distributor’s subscribers can receive digital signals.
In 2004 approximately 1.6 million Canadian households subscribed to a digital cable service, and the introduction of applications such as interactive program guides, VoD and e-mail are likely to encourage more consumers to do so.Mobile services have grown quickly, with access to networks now available to over 95% of Canada’s population, and more than one third of Canadians using a mobile service.
Although demand is expected to remain strong for the foreseeable future, the market is moving towards saturation as in many other developed countries.
By 2005, the Canadian mobile market had reached approximately 16 million subscribers.
In terms of future wireless developments, the key issue facing both current Second generation (2G) and potential Third generation (3G) mobile telephone licences is a lack of capital for network expansion.