CRTC telecom competition report notes role of strong wireless carriers

For the fifth and final year, the Canadian Radio-television and Tele-communications Commission has reported on the status of competition in Canadian telecommunications markets. But despite the end of its legislative obligation, the CRTC has decided to continue monitoring the industry and issuing these annual reports.Since it started monitoring the market, the commission has noticed that regulatory changes, technological developments and consolidation of companies have molded a more competitive market.
Affected by the growth of the Internet and wireless services, the industry continued its evolution from a highly regulated entity to an almost completely market driven sector. Who would have imagined just five years ago, when the commission began its monitoring, that a framework for forbearance from regulation of residential and business local exchange telephone services would now be in the works?
Revenues for the industry continue to grow. In 2004, there was a 4.7 per cent increase in total revenues. Wireless carriers’ revenue increased from $31.8 billion to $33.3 billion in one year. The wireless sector remains a market driver with an 18 per cent increase in revenue since 2003.
In looking at market segments, an interesting story emerges. While long distance revenue declined by six per cent, the actual number of minutes increased by the same percentage, illustrating the effectiveness of competition from a consumer stand point.
Local wireline services remain the largest portion of the market, generating 29 per cent of the total industry’s revenues. Competition is more limited to major centres and competitors still remain dependent on the incumbents’ facilities. This is unlikely to change in the near future due, in part, to the high cost of building these facilities to support a small portion of the market share.
A competitor’s dream and unencumbered by traditional investments in plant and regulatory confines, the wireless market continues to display strong growth with 17.6 per cent increase in revenue. The market is divided primarily among three major entities with no one dominating the market.
In a recent Decima survey, 64 per cent of respondents said they believe they have benefitted from telecom competition. The CRTC’s goal is to ensure that the changes in the regulation of the telecommunications market in Canada would benefit the users of the services, and it seems the commission has created a positive, competitive environment.

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Jim Love, Chief Content Officer, IT World Canada

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