The pie has grown a little bit since ’01 and wireless carriers are pigging out

The Canadian Radio-television and Telecommunications Commission has released its third of five annual reports it is scheduled to deliver on the health of telecommunications competition.

The telecom pie is getting bigger, but only by inches. Last year, total revenues were approximately $32.2

billion, less than one per cent higher than revenues in 2001. The big winners were the wireless and high-speed Internet providers, who experienced double digit growth.

Incumbent telecommunications companies remain dominant in the local market, collecting 95 per cent of the revenues. However, they were hit with a drop in revenues from local service. Competitors made inroads into this market segment, primarily in urban areas. They garnered between 10 and 20 per cent of local business market and between one and 13 per cent of residential lines.

In the long-distance market, the pressure of competition has lead to decrease in rates, resulting in a decline in revenue by 2.8 per cent.

However, Canadians are calling more. The number of long distance minutes grew by 3.5 per cent in the last year.

The Internet continues to be a growth area. Access revenues grew by 27 per cent. The market split among the incumbent telephone companies with 41 per cent, cable companies with 35 per cent and other suppliers with 23 per cent. High-speed access remained very popular (28 per cent of all Internet households) and grew in those communities where broadband deployment is a reality. Rural communities for the most part remain unserved.

The cellular market continued to grow, capturing two per cent more of the overall telecommunications revenues. Total market revenues for mobile service increased by 11 per cent. Data and private line market revenues increased by approximately 1.6 per cent. However, the competitors lost about 20 per cent market share.

Ultimately, the success of the government’s competition policy is measured by whether consumers feel that they are well served and have significant choice. According to the CRTC report, 72 per cent of Canadians believe that competition has been good for them, providing them with more choice and better prices. What is true is that if you live in urban areas there is greater choice. However, there is a long road to travel before competitive choices are available to all Canadians, no matter where they live.

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Jim Love, Chief Content Officer, IT World Canada

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