Wireless is the fastest growing sector of the Canadian telecommunications market and is presenting opportunities for U.S companies to export technologies, products and services. U.S. companies will be able to take advantage of opportunities in wireless cellular services (particularly in wireless network development), innovative cellular hardware and software development, ultra wideband technology & devices, wireless fidelity (Wi-Fi) Access Points and technology and channel marketing partnerships.
The wireless market in Canada is comprised of telecommunications services provided by mobile wireless access facilities. These services include mobile telephony, mobile data such as text messaging, roaming, wireless Internet access and to a lesser extent, paging services. Satellite services associated with mobile telephones are also included in this segment. This report summarizes the Canadian wireless market by looking at its present and future dynamics and suggests opportunities for U.S. businesses and equipment providers.
Market demand for wireless services and equipment varies by region: residents in Alberta in 2009 had the highest household penetration rate at 82%, while Quebecers trail all other regions by a significant margin at 61%. This regional variance has been a consistent trend since 1997. Penetration is highest among younger users between the ages of 18 and 34 with almost half of all Canadian mobile owners belonging to this demographic. Among those who owned or had access to a wireless phone in their household in 2008, one third (32%) indicated only one wireless phone was in use in their household, while over two thirds of them (69%) reportedly had access to two or more wireless phones, including 11% with access to four or more. Canadians identified ‘talking’ as the most important activity performed on their phone, followed by text messaging and taking photos. The introduction of ‘smartphones’ and 4G LTE platforms into the Canadian market is scheduled for late 2011 and is likely to spur future high demand for more sophisticated functions using the mobile web such as music, games, and browsing the internet.
Wireless Subscribers and Penetration
The Canadian wireless industry witnessed relatively strong subscriber growth during the first half of 2010 following the end of the country’s economic recession in late 2009. According to the Canadian Wireless Telecommunications Association (CWTA), the wireless sector experienced a 5.2 percent subscriber growth from 2009-2010. Today, almost 75 percent of Canadian households have access to a wireless phone. While still low, the wireless penetration rate is expected to continue to rise: Merrill Lynch forecasts Canadian market penetration will reach 103 percent by 2018. Three major wireless service providers dominate the Canadian wireless market: Rogers Wireless, Bell Mobility, and Telus. Almost a third of these subscribers are with Rogers (9 million), followed by Bell Mobility (7 million) and Telus at a close third (6.9 million).
Ranked as the country with the most HSPA+ networks in the G8, Canada’s wireless sector revenues totaled $16.9 billion in 2009 and comprised the largest component of total telecommunications revenues at over forty percent. This number is expected to double by 2013. Data revenues will become even more important with upgrades being made to the HSPA+ networks and then to 4G LTE platforms in August of this year. Experts estimate subscribers to 4G wireless broadband in 2015 will reach 17 million from the 400,000 currently registered. Furthermore, wireless market subscriber growth is likely to experience resurgence as five new players in the wireless market continue to expand their companies and services. Globalive’s Wind Mobile launched services over a 3G network in Toronto in December 2009, while newly created Public Mobile launched its mobile services in early 2010. Another two, Dave Wireless’ Mobilicity and cableco Vidéotron’s Vidéotron Wireless, launched in the middle of 2010. The fifth new entrant, the cable company Shaw Communications, expressed its intention to enter the wireless mobile market in early 2012.
Wireless Coverage and Services
The sheer size of Canada’s territory in addition to its vast population spread demands that the wireless industry service a huge geographic area. With a population density of 4 people per sq km, Canada is much more sparsely populated than Europe (70 p/km²) and the United States (30 p/km²). Nearly 99 percent of the current population is serviced over a geographic area of approximately 501,933 square miles.
Canadians are serviced by 57 licensed operators, some with national coverage and others operating regionally. Due to their smaller size relative to global operators, Canadian operators have taken a "smart follower" approach when it comes to the commercial deployment of new technologies and services. While a smart follower approach makes good business sense for an operator, a consistent lag in the commercial deployment of new technologies and, more importantly, slow monetization of the technology investment, impacts the entire value chain.
Bell, Telus, and Rogers all have HSPA networks covering 97% of the Canadian population and HSPA+ networks in most big cities. All three of these wireless carriers are in the process of rolling out the 4G experience to their clients. This 4G network will be capable of reaching a speed of 100mbits per second, a speed comparable to that of Verizon and AT&T in the United States.