OTTAWA-GATINEAU — The Canadian Radio-television and Telecommunications Commission (CRTC) released today its sixth annual Telecom Monitoring Report. This year’s report shows that the development and adoption of new technologies continued to impact the industry by reducing costs and enabling the delivery of traditional services by non-traditional service providers such as cable broadcasting distribution undertakings (BDUs).
“The telecommunications sector is evolving rapidly as we move towards increased reliance on market forces,” said CRTC Chairman Charles Dalfen. “Monitoring the latest developments in the industry is of vital importance in carrying out our mandate.”
Highlights
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.
Canada continued to have a very high wireline and wireless telephone household penetration rate of 98.9% and a very high Internet household subscription rate of 64%. Moreover, 51% of all households subscribed to high-speed Internet service in 2005.
The cable BDUs have evolved their Internet and distribution network infrastructure and have entered the local residential telephone market. They had approximately 54% of high-speed Internet subscribers.
The telecommunications industry's earnings before interest, taxes, depreciation and amortization (EBITDA) rose from $11.5 billion to $12.4 billion, 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.
Local and access
The local and access sector is now the second-largest in the telecommunications market, accounting for 28% of total industry revenues.
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.
Long distance
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.
Internet and broadband services
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 having access to broadband services.
Data and private line
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.
Wireless
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.
Background
The 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.
The CRTC
The CRTC is an independent, public authority which was established to sustain and promote Canadian culture and achieve key social and economic objectives by regulating and supervising Canadian broadcasting and telecommunications in the public interest. As an expert tribunal it takes into account the wants and needs of Canadian citizens, industries and various interest groups. The CRTC is governed by the Broadcasting Act and the Telecommunications Act and reports to Parliament through the Minister of Canadian Heritage.
Reference document: 2006 CRTC Telecommunications Monitoring Report [.htm][.pdf]
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