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October 5th, 2005, 07:25 AM
Canada greatly lags U.S. in wireless penetration
By JOHN PARTRIDGE
Tuesday, October 4, 2005 Posted at 9:17 PM EDT
From Wednesday's Globe and Mail
Here's another kick in the national pride for anyone under the illusion Canada is the world leader in telecommunications it likes to think it is.
Even though the number of Canadian subscribers to wireless telecom services — cellphones and BlackBerrys and all that good stuff — finally cracked the 15 million mark in the first quarter of this year, we are still well behind the United States when it comes to overall market penetration.
Statistics Canada reported Tuesday that at the end of March there were 47 wireless subscribers for every 100 people in this country, a level reached in the United States in mid-2002. In fact, the most recent U.S. figure available indicates that at the end of last year, there were 61.7 wireless subscribers for every 100 people, according to Statscan analyst Cimeron McDonald.
He wouldn't venture an explanation, but telecom analysts were happy to oblige — although not before pointing out that U.S. wireless penetration itself is way, way below levels throughout most of Europe.
“We're not exactly comparing ourselves against best of breed in the wireless stakes when we take the U.S. as our metric. Even so, when we [do] we're pretty much the weakling,” said Iain Grant, managing director of Montreal telecom consulting firm Seaboard Group.
In fact, Canada ranks just 27th in wireless penetration among the top 30 member countries of the Organization for Economic Co-Operation and Development, according to an OECD survey.
A recent Seaboard study concluded that Canadians are less driven to go wireless because prices are still relatively high compared with the alternative, traditional wireline service. “Canadians do get a deal on wireline pricing. Therefore the ... need to move to wireless is not so compelling,” Mr. Grant said.
The study found that the average wireless customer in Canada pays a startling 60 per cent more than they would under a U.S. plan, and a 19-per-cent premium over customers of European carriers.
There are several reasons for the difference between U.S. and Canadian wireless prices. Ian Angus of Angus Telemanagement Group Inc. notes there are six or seven national players in the U.S. market so competition is fiercer than in Canada, which has only three. And U.S. competition has intensified in recent years with the spread of number portability, which allows subscribers to keep the same telephone number if they switch between providers, whether wireline or wireless. Canada's telecom regulator isn't expected to force carriers to provide this until 2007.
How much higher is wireless penetration in Europe? Figures from the International Telecommunications Union indicate rates of nearly 103 per cent of the population in Britain, more than 109 per cent in Italy and 119.4 per cent in Luxembourg. These seemingly impossible percentages stem from a growing phenomenon of users subscribing to more than one wireless service, one for the office and one for personal use, for example, said analyst Eamon Hoey, who heads telecom consulting firm Hoey & Associates Inc. of Toronto.
Mr. Hoey agrees Canada is far behind Europe in wireless technology. “And we're not going to catch up. Canada used to be a country where we prided ourselves on our telecom capability, but no more. We're not even a player any more.”
The gloomy prognosis came even as shares of Toronto-based Rogers Communications Inc., Canada's largest mobile telephone and cable operator, hit a five-year high Tuesday, a day after it raised its 2005 subscriber forecasts. Rogers' class B non-voting shares traded as high as $49.60 apiece on the Toronto Stock Exchange, before closing at $49, up 65 cents from Monday's finish.
By JOHN PARTRIDGE
Tuesday, October 4, 2005 Posted at 9:17 PM EDT
From Wednesday's Globe and Mail
Here's another kick in the national pride for anyone under the illusion Canada is the world leader in telecommunications it likes to think it is.
Even though the number of Canadian subscribers to wireless telecom services — cellphones and BlackBerrys and all that good stuff — finally cracked the 15 million mark in the first quarter of this year, we are still well behind the United States when it comes to overall market penetration.
Statistics Canada reported Tuesday that at the end of March there were 47 wireless subscribers for every 100 people in this country, a level reached in the United States in mid-2002. In fact, the most recent U.S. figure available indicates that at the end of last year, there were 61.7 wireless subscribers for every 100 people, according to Statscan analyst Cimeron McDonald.
He wouldn't venture an explanation, but telecom analysts were happy to oblige — although not before pointing out that U.S. wireless penetration itself is way, way below levels throughout most of Europe.
“We're not exactly comparing ourselves against best of breed in the wireless stakes when we take the U.S. as our metric. Even so, when we [do] we're pretty much the weakling,” said Iain Grant, managing director of Montreal telecom consulting firm Seaboard Group.
In fact, Canada ranks just 27th in wireless penetration among the top 30 member countries of the Organization for Economic Co-Operation and Development, according to an OECD survey.
A recent Seaboard study concluded that Canadians are less driven to go wireless because prices are still relatively high compared with the alternative, traditional wireline service. “Canadians do get a deal on wireline pricing. Therefore the ... need to move to wireless is not so compelling,” Mr. Grant said.
The study found that the average wireless customer in Canada pays a startling 60 per cent more than they would under a U.S. plan, and a 19-per-cent premium over customers of European carriers.
There are several reasons for the difference between U.S. and Canadian wireless prices. Ian Angus of Angus Telemanagement Group Inc. notes there are six or seven national players in the U.S. market so competition is fiercer than in Canada, which has only three. And U.S. competition has intensified in recent years with the spread of number portability, which allows subscribers to keep the same telephone number if they switch between providers, whether wireline or wireless. Canada's telecom regulator isn't expected to force carriers to provide this until 2007.
How much higher is wireless penetration in Europe? Figures from the International Telecommunications Union indicate rates of nearly 103 per cent of the population in Britain, more than 109 per cent in Italy and 119.4 per cent in Luxembourg. These seemingly impossible percentages stem from a growing phenomenon of users subscribing to more than one wireless service, one for the office and one for personal use, for example, said analyst Eamon Hoey, who heads telecom consulting firm Hoey & Associates Inc. of Toronto.
Mr. Hoey agrees Canada is far behind Europe in wireless technology. “And we're not going to catch up. Canada used to be a country where we prided ourselves on our telecom capability, but no more. We're not even a player any more.”
The gloomy prognosis came even as shares of Toronto-based Rogers Communications Inc., Canada's largest mobile telephone and cable operator, hit a five-year high Tuesday, a day after it raised its 2005 subscriber forecasts. Rogers' class B non-voting shares traded as high as $49.60 apiece on the Toronto Stock Exchange, before closing at $49, up 65 cents from Monday's finish.