(Disponible en français : Évolution du secteur canadien des télécommunications sans fil)
In 1993, the last year there was a major revision of the Telecommunications Act, telecommunications consisted mostly of voice communication over landlines.
At that time, revenue for wireless communications amounted to just over 6% of the revenue for landline (or wireline) communications; today, wireless revenue has grown to almost 150% of that for landline.
While telecommunications still includes voice communication, it now also includes the transmission of data, as well as text and video messages.
Figure 1 illustrates the movements in revenue for wireline, wireless and Internet services between 1984 and 2014. Several developments are noticeable: the rapid growth of wireless revenue; the downturn in wireline revenue starting in 2000; and the point in 2009 at which revenue for wireless equalled the revenue for wireline. Additionally, between 1996 and 2014, the revenues of Internet services providers rose from $239 million to $8.9 billion.
Figure prepared by authors with data from Canadian Media Concentration Research Project (CMCRP), The Growth of the Network Media Economy in Canada, 1984 – 2014, November 2015.
It is the advances in the Internet (and related telecommunications technology) from the early 1990s, as well as the development of wireless devices to tap the expanding capabilities of the Internet, that explain the remarkable growth of the wireless component of telecommunications.
Advances in digital technology improved Internet
Advances in digital technology improved the ability of the Internet to handle large data files, especially video files. Additionally, entrepreneurs found ways to offer services that were desirable and accessible for ordinary Internet users.
Until the 21st century, the Internet was primarily a fixed, wire-based technology; since then, the development of mobile devices such as smart phones and tablets has allowed users to access the Internet wirelessly. Furthermore, wireless technology has also been a key driver of the rapid adoption and clout of social media.
According to the recent CRTC Communications Monitoring Report (2015), wireless is now the largest component of the converged communications sector, which includes the once-distinct components of broadcasting and telecommunications.
Moreover, for the first time, more Canadians rely exclusively on mobile wireless telephone services than exclusively on wireline telephone services.
In addition, in 2014, wireless offered the availability of high-speed Internet, that is five megabits per second (Mbps) or higher, to 93% of Canadian households. This penetration rate was greater than that offered by any other technology, including cable modem (81%), DSL (79%), fixed wireless (51%) and fibre optic (20%).
Versatility and importance of wireless raise concerns
The growing versatility and importance of wireless communication have raised concerns, especially with regard to equal access for all Canadians. According to recent data from the Canadian Radio-Television and Telecommunications Commission (CRTC), 99% of Canadian households have access to mobile Internet with speeds of 1.5 Mbps or greater.
Almost all those without coverage are in rural and remote areas where costs of providing coverage are high, and private-sector companies, without government incentives, will not find it economical to add coverage.
Even with 100% coverage, not everyone might subscribe to a wireless service. Today, the penetration rate for wireless is just over 80% of the population; so about one in five Canadians do not take advantage of the versatility of current mobile devices.
One reason could be cost. Households with low incomes are less likely than those with high incomes to have a cell phone, and thus pay for wireless service (Table 1).
Table 1: Household Access to Cellphones by Income Quintile, 2013
|Annual Income Levels ($ thousands)||Up to
|Percentage of Households with a mobile phone||66.8||79.7||88.5||92.9||96.4|
Source: Canadian Media Concentration Research Project (CMCRP), The Growth of the Network Media Economy in Canada, 1984 – 2014, November 2015.
Competition may also be an issue
If price affects penetration, then a less competitive industry, with higher than competitive prices, may also be a concern. Currently, Bell, Rogers and TELUS account for over 90% of wireless subscribers. During the past few years, the federal government introduced several policies to promote competition and bring more players into the wireless market.
In 2008, it used caps and set-asides in spectrum auctions to attract new entrants and smaller companies into becoming wireless service providers. In 2012, it relaxed foreign ownership rules for smaller telecommunications companies.
Notwithstanding these policies, there still remain a few large players in the wireless sector, although in December 2015, Shaw announced its acquisition of new entrant Wind Mobile. In 2013, the CRTC introduced the Wireless Code to prevent or limit possible abusive practices by wireless service providers.
Prices, however, have remained relatively high in Canada. A study prepared for the CRTC compared various wireless service packages, ranging from limited minutes of voice and number of texts (Level 1) to unlimited voice and text with several GB of data (Level 5).
It found that in 2015 Canadian wireless services, while less costly than those in the United States, were generally more costly, on average, than those in the G7 countries and in Australia (Figure 2).
Source: Prepared by the authors with data from CRTC Price Comparisons of Wireline, Wireless and Internet Services in Canada and with Foreign Jurisdictions (2015 Update).
Currently, communications in Canada are regulated under three separate federal statutes: the Telecommunications Act (1993), the Broadcasting Act (1991), and, for the administration of spectrum, the Radiocommunication Act (1985). It is noteworthy that all three acts predate the Internet-related changes in broadcasting and telecommunications, as well as the convergence of the two sectors. In contrast, other jurisdictions have consolidated communications legislation into one comprehensive statute.
The CRTC Wireless Code, Canadian Radio-television and Telecommunications Commission, 2013.
The 700 MHz Spectrum Auction, Dillan Theckedath, Terrence J. Thomas, Hill Note, Library of Parliament, 2012-16, 5 April 2012.
Cisco Visual Networking Index: Global Mobile Data Traffic Forecast Update 2014–2019, White Paper, 3 February 2016.
Authors: Dillan Theckedath and Terrence J. Thomas, Library of Parliament
Categories: Information and Communications