Canada's mobile industry:
Still lots of room to grow
by Gail Chiasson
Canada’s wireless industry will have a new face in the next few months, when Canada’s big three: Bell Mobility, Rogers Wireless and TELUS Mobility will find themselves in competition with at least three new players
Public Mobile, DAVE Wireless and Globalive, all winners of last year’s spectrum auction.
It’s not as if they don’t already have competition. Along with several smaller players, and spectrum winner Vidéotron — which has quietly launched a mobile operation, with much bigger plans for the future — they have competition from various smart phone manufacturers, PDAs, and to some extent, pagers.
While 2008 figures aren’t yet available, the wireless industry generated approximately $12.5 billion in 2007, according to figures compiled by the Canadian Wireless Telecommunications Association. The CWTA has 17 members, including four new members, or 16 if one considers that Virgin Mobile was recently bought by Bell. Canada’s current mobile carriers invest more than $1 billion in mobile phone communications infrastructure each year. The members of CWTA also pay licence fees in excess of $150 million each year — more than two-thirds of the total fees collected by Industry Canada from all spectrum users.
Cellular service was launched in Canada in 1985. Paging has been available in Canada for over 30 years. And there are well over 1 million mobile radio units in operation in Canada, with an estimated 80% used in private networks. But when one talks about the mobile sector, one also has the consider what else is involved, and that ranges all the way from mobile satellites to companies that provide content for mobile phones.
According to the CWTA, aggressive competition, inventive marketing and exceptional customer service are some of the reasons for the impressive growth of the wireless companies. And the companies work together cooperatively to provide Canadians with such requirements as inter-carrier text messaging, common short codes, interoperable Wi-Fi hotspots, and the recently launched EnStream with its Zoompass.
And each of the wireless service providers offers a range of mobile devices that, in addition to voice calls, provide always-on data connections that allow access to e-mail and instant messaging, corporate networks and the Web.
At the end of December, 2008, Canadian wireless phone subscribers numbered 21.5 million, representing a national wireless penetration rate of more than 67%. CWTA research estimates wireless penetration in major urban centres has exceeded 70%, with some greater metropolitan areas approaching the 80% mark.
However, there’s lots of room for the new players. There are still close to 35% of Canadians who don’t have a cell phone, and that’s what the new players are counting on. In fact, despite Canada’s strength in communications networks and technology, it is in 30th place among industrialized nations in terms of cell phone ownership.
In addition to the phones sold directly by carriers, there are more than 2,000 companies from which to obtain a phone.
However, while the CWTA says that customers in Canada continue to enjoy prices that are below or close to the average wireless prices across the 30-member countries of the Organization for Economic Co-operation and Development, Alek Krstajic, CEO of the yet-to-be launched Public Mobile, says that Canada’s price per minute is the highest of all. Further, he notes, the top three players in Canada have the highest margins, ranging at about 50%.
Nevertheless, two-thirds of Canadian households currently have access to a mobile phone. Some use it for simply as a phone (or phone and camera) to contact family, friends, workplace or for emergencies. (Canadians place more than 6 million calls annually to 911 or emergency numbers.) But a growing number use more and more of the features and apps available on more and more phones. These days, Canadians send more than 77 million text messages daily. That’s more than twice the entire population of Canada!