Convergence Consulting Group’s 2016 report on the Canadian wireless market predicts that 76 percent of Canadians will use smartphones by the end of this year.
While an impressive statistic in itself, that would translate to only a marginal gain of three percentage points from the amount recorded at the end of 2015. Convergence forecasts that 753,000 wireless subscribers will join the marketplace this year, with 49 percent subscribing with new entrants Eastlink, Videotron or Wind. If Convergence is correct, that means established telecomm giants such as Rogers and Bell will be fighting over only approximately 400,000 new subscribers.
These numbers are in-line with a recent Scotia Capital report covered by MobileSyrup that suggested the Canadian wireless market is becoming saturated. In the report, analyst Jeff Fan presents data showing a significant decline in the number of people signing up for new voice and data lines.
Unfortunately for Canadian consumers, a saturated market will likely mean more expensive plans and an increase in paid add-ons. Convergence predicts the average revenue per user (ARPU) generated from customers will rise by 1.6 percent, likely because of the market’s stagnation. This may be a conservative estimate, however, as 2015 saw a 2.6 percent growth in ARPU.
This is likely to drive complaints from Canadian wireless users. Billing issues have already been singled out by the Commissioner for Complaints for Telecommunications (CCTS) in its August 2015- January 2016 report as the top complaint made by Canadian users against their wireless providers.
Convergence does expect to see some growth in the wireless market — but the rates are not likely to keep up with the Canadian wireless industry’s appetites. Convergence estimates residential phone lines declined by 6 percent in 2015, and expects it will decline by the same amount in 2016. In accordance with that, Convergence expects to see Canadian wireless-only households rise from 32.5 percent at year end 2015 to 37 percent at year end 2016.
Convergence predicts the new entrants to the wireless market — Eastlink, Videotron and Wind — will have a 7.2 percent share of the market by the end of 2016, up by 1.1 percent from 6.1 percent at year end.
Related reading: What happens when Canada’s wireless market gets saturated?
[source]The Convergence Consulting Group Ltd.[/source]
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