Canadian telecom sector will see ‘limited growth’ this year: Report

Ian Hardy

February 3, 2016 1:26pm

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.

  • JJ

    “Despite the challenges, the industry’s financials remain exceptionally strong,” said the report.

    Yeah no sh!t. They’re gauging customers with price increases even when they’re strong financially.

    • Allan

      Buy some of their shares then.

    • Laer

      Unfortunately that won’t solve anything. You would need a substantial amount of money to earn enough to pay for your phone plan with profits.

      Soon this scheme would lead to over valuation of the stock and diminishing returns before a crash.

      Just bend over, it’s free!

  • Laer

    “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.”

    They will get their pound of flesh.

    Typically this type of slow down would lead to increased competition as business fight for market share.

    Clearly even the analytical rhetoric agrees that market capture will drive higher prices.

  • awhite2600

    It’s also possible that the market is just reaching a saturation point. Anyone that wants a mobile device likely has one already. There will be new customers (kids reaching an age to get a phone, new Canadians) and there will be customers who die or cancel for some reason.

  • Renault Cartier

    Let’s go Rogers, Bell and Telus…you have a good reason to increase your already expensive fees!!!

  • Mo Dabbas

    I bet this “limited growth” does not include the prices.

    • Sérgio Da Silva

      Now is time to keep increase the prices!

  • will

    “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”
    Usually companies reduce price to remain competitive……not increase. In Canada they do the opposite.

    • h2oflyer

      They are worried about Mar 1 when they have to offer basic skinny cheap TV package, with single channel add ons later in the year.

      They are supposedly worried about “competition” in their announcements. They must do “rock, scissors, paper” to see who brings the coffee to the meeting