Telecoms added over 1.4 million new wireless subs in 2018

Canada’s publicly traded telecom companies added more than one million total wireless customers last year, putting an exclamation point on a year of explosive growth in the sector. The five largest wireless carriers added 1,454,180 new subscribers to their base in 2018, pushing their combined sub roster to over 32 million. That’s an additional 527,700 new wireless customers compared to 2017, when the companies added a total of roughly 926,000 new subscribers. It's the first time an eight-year tally by The Wire Report shows the major wireless players -- BCE Inc., Rogers Communications Inc., Telus Corp., Shaw Communications Inc., and Quebecor Inc. -- gained a total of over one million subscribers in a single year. Bell was in the lead with 443,695 new wireless subs in its fiscal 2018, followed by Telus with 324,000, Rogers with 301,000, Shaw with 255,685, and Quebecor’s Videotron with 129,800. Rogers finished the year with a base of 10.8 million, Bell finished with 9.6 million, and Telus with 9.2 million, while Shaw was at 1.4 million, and Quebecor, which released its fourth quarter earnings Wednesday, reported a total wireless base of 1.15 million. The telecoms’ wireless subscriber additions have grown every year since 2013, according to a Wire Report compilation tracking the data, using each company’s fourth-quarter subscriber data. The wireless milestone came at a time when the industry continued a seamingly unhindered growth spurt, taking the baton from a previous year that showed consecutive quarterly growth. It helped that Shaw continued making inroads with its wireless division, which began deploying additional wireless spectrum it previously purchased to expand its Freedom Mobile brand. The Calgary-based company boosted TV industry numbers a couple of years ago, being the first to adopt Comcast Corp.’s X1 platform for its BlueSky TV service. This time around, Freedom fanned the flames and helped propel the growth of wireless in the country, which Rogers head Joe Natale said in mid-2018 still has room for growth. The company added just over a quarter of a million subs in 2018, compared to around 104,000 the year prior, adding credence to its viability as a burgeoning fourth player -- despite network quality concerns relative to the more established brands. Not to be outdone, on the cusp of the holiday season last year, Freedom announced subscribers on select plans would be given an additional one-time allotment of 100 GB of data. It was a move in line with its focus on ridding its base of overage fees, but taken together with some of its other promotions, not altogether out of step with its strategy: this is the same company that shook the industry in 2017 with its $50 for 10 GB “Big Gig” data plans and preempted its competitors’ low-cost data proposals with a low-cost data offer ready for takers (the incumbents subsequently upped their offers). The splash from the Big Gig promotion created a heated promo war among the telecoms, when the incumbents capitulated and began offering their own iterations of the deal -- along the way hobbling systems and temporarily putting a blemish on Telus’ storied churn rate. The rate at which customers leave for another company, or churn, has been one of last year’s big stories for wireless. Ambitions for ever-lower churn figures were already planted in 2017, with questions being put to executives on whether more telecoms can get to sub-one per cent churn, as Telus has managed. Some have pointed to improved customer service experience efforts to keep subscribers inside the ecosystem. But in the shadow of the postpaid growth story -- the vast majority of wireless subscribers are on postpaid -- sat a prepaid sector that factored into the customer loyalty equation. In 2017, Bell’s chief financial officer Glen LeBlanc told Drew McReynolds of RBC Capital Markets about the advantages of having a strong prepaid base. The reasoning went that customers would be introduced to the company on a short-term basis until they’ve reached a level of customer satisfaction and brand loyalty that compelled them to move onto a longer-term postpaid contract. Bell subsequently launched low-cost, prepaid carrier Lucky Mobile, which was in-line with the current government’s focus on more affordable options for Canadians. Other carriers have been able to leverage their flanker brands, such as Rogers’ Fido, and convert their customers to postpaid subscribers. Videotron, which in the summer of 2018 expressed more interest in the prepaid segment, launched its flanker brand called Fizz with that goal in mind. Telus also acknowledged the strategy when its CEO, Darren Entwistle, noted the company wants to “cultivate” and “harvest” that base for migrations to postpaid. Wireless industry growth has often been attributed by company executives to several factors, including healthy immigration and more Canadians taking-up multiple devices. But even then, last year Telus flagged a concern about the “quality” of the new telecom subscribers by questioning how many of those additions are purely smartphones, which carry higher average revenues per user (ARPU), and not just tablets and flat-rate wireless home phone service, which incur lower ARPU. The telecoms also posted big internet gains, adding over 527,000 subscribers last year combined, a marked increase from the 354,000 the year prior and continuing an upward trajectory since 2016. Rogers added 200,000, Bell increased its internet customer base by 143,790, Telus by 115,000, Shaw added 18,150, Cogeco Inc. notched an additional 12,408, and Quebecor ended with an added 38,000. Despite big gains in wireless and internet, television losses increased after losing fewer subscribers in 2017 versus the previous period. Shaw lost just north of 107,000, Rogers declined by 55,000, Quebecor fell by 43,200, Cogeco by 31,868 and Telus by 5,000. Bell actually gained 20,781 subscribers. The total loss was over 221,000, versus a decline of 157,000 the year prior. — With reporting by Ahmad Hathout at ahathout@thewirereport.ca and editing by Anja Karadeglija at akarad@thewirereport.ca

Telecoms added over 1.4 million new wireless subs in 2018

News | March 13, 2019

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Telecoms added over 1.4 million new wireless subs in 2018

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