The Canadian telecom sector will see “limited growth” this year, according to a report from the Conference Board of Canada,
The report indicates the slowdown will be caused by uncertainty in the Canadian economy, specifically pertaining to high levels of debt and constrained job prospects in certain sectors.
“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.
According to the report, the Canadian telecom sector will grow 1.4 percent in 2016, up from 0.4 percent in 2015. The small growth will lead telecom providers to adjust their pricing, which is predicted to result in consumers limiting or reducing the number of services they subscribe to, in order to keep costs in check.
In an effort to remain competitive, this January several Canadian carriers raised voice and data plan prices by an average of $5 per month. This shift affects customers upgrading existing plans, as well as new wireless customers.
With over 32 million wireless subscribers in the country, Canadian carriers are searching for new ways to increase revenue and grow their customers base. One method is related to the consumption of video content and streaming services, such as Crave TV, Netflix and Shomi, and also streaming music platforms like Apple Music and Google Music – all services that increase subscriber data usage significantly.
“Despite the challenges, the industry’s financials remain exceptionally strong,” said the report.
Source: Conference Board of Canada