Canadian Telecom Sector to See “Limited Growth” in 2016, Says Study

by Istvan Fekete on February 4, 2016

rogers-telus-bellAfter examining the short- and medium-term economic and profitability outlook for Canada’s Telecommunications Industry, a new report from the Conference Board of Canada authored by Kristelle Audet claims the telecom sector will see “limited growth” this year.

The report suggests that the slowdown will be caused by uncertainty in the Canadian economy, weak job prospects, and high levels of debt.

As detailed in the 12-page report, the Canadian telecom sector will likely grow 1.4% this year, up from 0.4% in 2015. A foreseeable result is that wireless carriers will adjust their pricing, which will trigger another limit from subscribers, as they will likely reduce the number of services they subscribe to, to keep their costs within the “affordable” range.

“Canadian consumption will grow only modestly in 2016. This, combined with sharp telecom price increases seen in the past couple of years, will likely prompt Canadians to review their telecom services and eliminate unnecessary options along the way,” said Kristelle Audet, senior economist at Canadian Industrial Outlook, in a statement sent to MobileSyrup.

Last month the Big 3 raised their monthly data plan prices by an average of $5. The rise will affect both existing and new customers.
Back in 2014, a Catalyst study revealed that 55% of Canadians owned a smartphone. Last year the penetration rate jumped to 68%, representing year-over-year growth of 24%.

There are 32 million wireless subscribers in Canada, and carriers are searching for new ways to increase their revenue and grow their customer bases. As such, they are turning to video content and streaming services such as Crave TV, Netflix, and Shomi, alongside music streaming services to increase subscriber data usage.

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Written by: Istvan Fekete. www.digitcom.ca. Follow TheTelecomBlog.com by: RSS, Twitter, Facebook, or YouTube.

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