Telecom-revenue growth trails consumer-spending increase: CRTC

Revenue from telecommunications services in Canada grew 2.4 per cent in 2014, the CRTC said Tuesday, falling short of the six per cent hike in average spending on communications services that year. In the second part of its annual communications monitoring report, the CRTC said telecommunications services revenue was in 2014 was $45.9 billion, up from $44.8 billion in 2013. The first part of the CRTC's communications monitoring report, released last Thursday, said average household spending on communications services in 2014 was $203.04 per month, up six per cent from 2013. The report released Tuesday, which focused on revenue, did not include broadcast-distribution services. A third report in this series dealing with the broadcast sector is expected in the coming days, though it already said in last week's report that revenue from TV services rose 1.4 per cent last year to $9.1 billion. That report also indicated average household spending on television services declined 0.7 per cent to $53.95 a month, on average. CRTC spokesman Eric Rancourt said in an email Tuesday that differences between the rate of growth for telecom revenue and consumer spending can be explained at least partially by the fact that the data dealing with revenue included wholesale and business-market revenue. 3Macs telecom analyst Troy Crandall said in a phone interview Tuesday that the fact business revenue was included in the latest report could have "watered down" the numbers somewhat. "You've always had this transition that's been going on with businesses over the past couple of years on the switchover to voice-over-IP (VoIP), and that has been leading to declines on business-access lines," he said in a phone interview. He added that, as seen recently in Western Canada, the difficulties seen in selling telecom services to businesses in tough economic times are not always mirrored on the consumer side. The CRTC report did not differentiate revenue separately between consumers and businesses for the wireless sector. For retail Internet services, it said residential revenue was up 10 per cent to $6.53 billion compared to a rise of 6.2 per cent to $1.32 billion in the business sector. The report showed there was revenue decline of 4.4 per cent for residential local phone and long-distance revenue to $5.22 billion, compared to a drop of four per cent on the business side to $3.87 billion. Wireless services revenue, overall, was up 3.9 per cent to $22 billion in 2014, the CRTC said. That compared to growth of 1.1 per cent for wireline services — which includes voice and Internet services — for a total of $23.9 billion. Last week's portion of the communications monitoring report showed households spent 14.1 per cent more last year on wireless services for an average of $79.08 a month, 5.3 per cent less for landline-phone services at $31.10 a month and 10 per cent more for Internet services at $38.91 a month. The CRTC report said 92 per cent of telecom revenue in 2014 came from retail operations — which includes residential and business customers — while the rest came from wholesale services. Retail revenue from telecom services was up 2.5 per cent to $42.1 billion, while wholesale revenue rose 2.1 per cent to $3.8 billion, the CRTC said. Wholesale wireless revenue was up one per cent while wholesale wireline revenue saw growth of 2.7 per cent, it added. The CRTC said large incumbent telephone companies accounted for 62 per cent of telecom-service revenue, followed by cable companies at 31 per cent. Resellers had three per cent of industry revenue, while other facility-based providers had three per cent and small incumbent telcos had one per cent. The overall rate of growth for telecom revenue of 2.4 per cent last year compared to 2 per cent in 2013, 2.8 per cent in 2012, 2.7 per cent in 2011 and 1.7 per cent in 2010. "You tell me what GDP in Canada is going to be and I can tell you what telecom growth is going to be," Crandall said, noting that companies in this sector are essentially "utilities." Canada's gross domestic product grew by 2.5 per cent in 2014, according to the World Bank. The CRTC said capital expenditures in the telecommunications sector were up 60 per cent from a year earlier to $14.7 billion in 2014. Among the other highlights of the communications monitoring report that the CRTC highlighted in a press release Tuesday was that 67 per cent of Canadians owned a smartphone in 2014, up from 62 per cent in 2013. Tablet ownership grew to 49 per cent last year from 39 per cent in 2013, it added. The CRTC also said that wireless data usage rose 15 per cent in 2014 to just less than one gigabyte per month on average for Canadians with smartphones or tablets. As various service providers start offering gigabit Internet speeds, the CRTC said that eight per cent of Canadian Internet customers were opting for a speeds of 50 Mbps or higher in 2014, which was up from four per cent in 2013. — With reporting by Derek Abma at dabma@thewirereport.ca and editing by Shruti Shekar at sshekar@thewirereport.ca

Telecom-revenue growth trails consumer-spending increase: CRTC

News | October 27, 2015

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Telecom-revenue growth trails consumer-spending increase: CRTC

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