Spending by Canadian businesses and consumers on wireless voice and data increased faster last year compared to 2009 as four new wireless services entered the market and pushed up the number of subscribers, according to the federal telecommunications commission.
In its annual communications monitoring report, which covers the telecom and broadcasting industries, the Canadian Radio-television and Telecommunications Commission (CRTC) said that in 2010 wireless carrier revenues from all providers hit $18 billion, up 6.6 per cent from 2009, the second year in a row wireless revenues were in single digits.
By comparison, wireless revenue in 2008 was up 10.4 per cent compared to 2007, and previous years the growth rate was even higher.
Iain Grant, managing director of the Montreal-based telecommunications consultancy SeaBoard Group, says the numbers reflect the increasing price competition among wireless carriers.
The number of Canadians subscribing to wireless services grew by 8.5 per cent to 25.8 million by the end of 2010.
The bad news for the industry is that the competitive presence of the new operators contributed to a reduction in the average revenue per user a month to $57.86 from $58.81, the report said.
Despite the increased competition, last year was the second consecutive year that wireless revenue growth was in single digits compared to the go-go years earlier in the decade.
Last year startups Mobilicity and Public Mobile joined Wind Mobile (which began operating the last two weeks of 2009) in hunting for new wireless customers. Also in 2010 Quebecor Media Inc.’s cable division, Videotron, which had been selling wireless using leased spectrum from Rogers Communications Inc., opened a new network using its own spectrum. In 2010 only Wind operated for the full year.
According to the report, the new entrants collected 25 per cent of new wireless subscribers last year.
The figures can be seen as further evidence backing Industry Canada’s strategy to encourage wireless competition, which is dominated by Rogers [TSX: RCI.A and RCI.B], BCE Inc.’s Bell Canada [TSX, NYSE: BCE] and Bell Aliant, and Telus Communications Co. [TSX: T, T.A; NYSE: TU].
At a time when mobile penetration was below 70 per cent, much lower than in the U.S. and other industrial nations, the government decided to set aside frequencies in the 2008 spectrum auction strictly for new entrants or existing carriers with small market share.