Telecom sector seeing revenue increase: CRTC telecom report

The CRTC has issued its annual telecommunications survey for 2021. Coming out of the pandemic shutdown, the numbers are generally good. The sector experienced a 3.4 per cent jump in total revenues that year, as opposed to the 1.4 per cent decline posted in 2020. That 2020 fall was the largest ever recorded in the Communications Market Reports (CMR). The only other decrease was in 2002 when the dot-com bubble burst. The chief factor in the 2021 increase was the nearly $1.3 billion that mobile revenues jumped and an increase of $600 million in wireline revenues. Total telecom revenues were $55.3 billion in 2021. Mobile made up $29.2 billion (an increase of 4.5 per cent), fixed internet accounted for $15.3 billion (up 8.4 per cent), local and access was at $5.6 billion (a drop of 4.6 per cent), data was at $3 billion (down 5.6 per cent), long distance hit $1.3 billion (a decline of 4.6 per cent) and private lines accounted for $1 billion (down 10 per cent). Most of the revenues went to large incumbent telecommunications service providers (TSPs) like BCE Inc., Telus Corp. and Saskatchewan Telecommunications Holding Corp. They made up 56 per cent of the revenue share. In second place were the cable-based carriers such as Rogers Communications Inc., Bragg Communications Inc. and Quebecor Inc. They drew 35.7 per cent of the revenues. Other facilities based carriers like Xplore Inc. accounted for 3.8 per cent while wholesale-based service providers such as TekSavvy Solutions Inc. and CIK Telecom Inc. made up 3.5 per cent of revenue share. In last place were small incumbent TSPs like Sogetel Inc. and Execulink Telecom Inc. who drew one per cent of revenues. The five largest groups in 2021– Bell, Rogers, Telus, Shaw (now part of Rogers) and Quebecor–accounted for 87.2 per cent of the total revenues. Roaming revenues dipped slightly during the pandemic. They represented four per cent of total retail mobile revenues in 2019 but only three per cent in the two following years. Roaming revenues were mostly generated by customers using service in the United States. The commission reported that by 2021 about 96.5 per cent of revenues in the telecom sector were produced from services which are forborne from regulation. Revenue percentages varied from a low of 74.7 per cent in private lines to a high of 99.7 per cent in mobile services. The amount of contribution, the subsidies paid to incumbents to offer high-cost residential local service, declined 63.4 per cent. In 2020 it was pegged at $49.9 million, plummeting to $18 million a year later. Capital expenditures rose as well. In 2020, wireline capex was $8.6 billion while wireless capex sat at $2.77 billion. In 2021, wireline posted capex of $9.51 billion and wireless $3.67 billion. The study found that churn rates for telecoms have been declining over the past few years, going from 1.5 per cent in 2017 to 1.1 per cent in 2021. Bell, Rogers and Telus continued to dominate the wireless market, earning 88.3 per cent of retail mobile phone revenues. The only exception was Saskatchewan, where SaskTel’s competition held the big three down to 58.4 per cent of the market. In 2021, Rogers held 31 per cent of the wireless market, down half a percentage point from 2020. Bell was unchanged over the two year period, posting 29 per cent. Telus’ share increased to 28 per cent in 2021, up from 28 per cent a year earlier. Other carriers accounted for 11.7 per cent of the market, a jump from 11.4 per cent in 2020. Retail fixed internet service was one of the sections that experienced growth in 2021, increasing nine per cent to $14.5 billion. Residential revenues jumped as households subscribed to internet packages with faster speeds and higher usage limits. The proportion of residences using speeds of 100 Megabits per second or faster grew from 47.8 per cent in 2020 to 52.7 per cent in 2021. “The fact that fixed internet service is an essential service has been especially evident during the COVID-19 pandemic during which Canadians relied on their internet service for remote work and education, access to news and information, as well as for entertainment,” the study said. “As many schools and workplaces transitioned online, data usage surged substantially.” Even the lowly payphone was not overlooked by the CRTC. The survey found that in 2021 there were 24,129 payphones in Canada, generating an average of $207 per unit. In 2017 there were 45,327 payphones earning $430 per unit. –Reporting by Paul Park at ppark@thewirereport.ca and editing by Jenna Cocullo at jcocullo@thewirereport.ca.

Telecom sector seeing revenue increase: CRTC telecom report

News | June 20, 2023

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