Trend is to wireless, but at slower pace than other nations
Tamara Gignac
Province
CALGARY — Canada‘s wireless market is booming as more consumers pull the plug on their home-phone lines in favour of a mobile substitute, new data released yesterday suggests.
Mobile carriers — including Telus Mobility, Rogers Wireless and Bell Mobility — added almost half a million subscribers between March and June 2005, according to Statistics Canada.
That’s a jump of 12.6 per cent over the same period last year.
At the same time, the number of business and wireline customers fell by 1.4 per cent, and revenues among landline telecom providers slipped to $5.5 billion, a decline of 2.8 per cent.
The trend is likely to continue — particularly among students and young urbanites — but at a slower pace than in other countries, said consultant Brian Sharwood of the SeaBoard Group.
“If you think about the process of buying and getting a phone, it’s often when you move,” Sharwood said. “In the States, you see that much more. Americans on average are more transitory than Canadians.”
Other contributing factors to the decline in residential phone-line use is the arrival of cable company rivals and the popularity of instant messaging, analysts said.
“While wireline is slowing down — and we expect the trend to continue — more than just wireless is replacing it,” said Jeff Leiper of the Yankee Group in Canada.
“I think there is an important role that’s being played by other technologies. E-mail, for example, has taken the place of a lot of local wireline calling.”
In the second quarter, wireless companies posted record operating revenues of $2.7 billion, up more than 16 per cent from the same quarter last year, while operating profits reached $742 million, up 12.8 per cent.
Analysts added there is still ample room for growth.
Only half of all Canadians own a cellphone, compared with virtually 100 per cent of Swedes and Italians, where prices are cheaper and there is more competition, Leiper said.
“Wireless penetration still lags far behind the other industrialized countries. The value proposition of wireless as purely a voice medium doesn’t seem to be as popular in Canada as it is elsewhere in the world.”
© The Vancouver Province 2005
