Communications Monitoring Report 2018

Link directly to Communications Services in Canadian Households: Subscriptions and Expenditures 2012-2016 Communications Services in Canadian Households: Subscriptions and Expenditures 2012-2016

This snapshot provides an overview of adoption of communications technologies by Canadian households from 2012-2016, and illustrates household communications expenditure trends. The data presented here is drawn from Statistics Canada’s Survey of Household Spending^{Footnote 1} and CRTC sources. Additional data on Canada’s communications industry is found in the Commission’s 2017 Communications Monitoring Report (CMR).

1. Quick Facts
2. What communications services do Canadian households use?
   • Mobile and landline subscriptions
     • Subscriptions by income quintile
     • Subscriptions by province
   • Internet subscriptions and computer ownership
3. What do Canadian households spend on communications services?
   • Expenditures by income quintile
   • Average monthly expenditures by location - urban centres vs. rural communities
   • Expenditures by age

Link directly to i. Quick Facts i. Quick Facts

Long Description

	Subscriptions (% of households)	Subscription growth 2015-2016	Monthly spending ($)	Monthly spending growth 2015-2016
Landline	67%	-7.1%	$27.50	-8.8%
Mobile	88%	+2.1%	$92.08	+5.5%
Internet	87%	+0.6%	$49.50	+6.5%
Television distribution	75%	-3.9%	$53.75	-1.4%

Note: “Television distribution” refers to cable, Internet Protocol (IPTV), and satellite services used to provide television services to households.

In 2016:

Canadian households continued to abandon landline telephone service in favour of mobile service, with almost a third subscribing to mobile service only.^{Footnote 2}

Household subscriptions to television distribution services^{Footnote 3} slowly declined, with about 3 in 4 households subscribing, while the percentage of households with Internet service slowly increased, passing 87%.

Canadian households spent an average of $222.83 per month for their communications services, an increase of $4.41 (2.02%) from 2015. In comparison, the average annual inflation rate in Canada was 1.4% in 2016, according to Statistics Canada.

Canadian households continued to spend more per month on mobile services ($92.08) and television distribution services ($53.75) than on Internet services ($49.50) and landline services ($27.50).

Link directly to ii. What communications services do Canadian households use? ii. What communications services do Canadian households use?

Long Description

• Households subscribing to landline and/or mobile service: 99.3%
• Newfoundland and Labrador had the lowest percentage of mobile-only households, at 14.2%.
• New Brunswick had the highest percentage of landline-only households, at 16.9%.
• 18.8% of Canadian households own 3 or more mobile devices.
• Households within the first income quintile allocate 8.6% of their annual income, towards communications services.

Household subscriptions in 2016:

Landline	67%
Mobile	88%
Internet	87%
Television distribution	75%

Within the Canadian communications system, it is important to highlight individual service subscriptions for landline, mobile, Internet, and television distribution services. Most, if not all, Canadians subscribe to one or more of these services, which play a major role in their everyday lives. This section reports Canadian adoption patterns by service type, income, and province.

Link directly to Mobile and landline subscriptions Mobile and landline subscriptions

In 2016, slightly more households subscribed to mobile services (87.9%) than Internet services (87.4%). Nearly all Canadian households (99.3%) subscribed to either mobile or landline service in 2016 (Table 1.1 on Open Data), and households owned on average 1.6 mobile phones.

Over the last decade, the percentage of households with landlines has decreased, while the percentage with mobile phones has increased (Figure 1.2). Fewer households are subscribing to both services – in 2016, almost a third (32.5%) of Canadian households were mobile-only households, and 11.4% were landline-only.

While the transition to widespread mobile phone use – partly as a substitute for landline service – is a long-term process, the historical data in Table 1.1 on Open Data shows how rapidly Canadian households have embraced mobile phones. In 2004, landline-only households (40.0%) far outpaced their mobile-only counterparts (2.7%). Landline and mobile penetration data show alternating trends over the last decade. Take up of mobile services surpassed landline services in 2012 when the latter dropped 5.6%, which is exceptionally fast considering the annual decline in landline penetration between 2004 and 2016 was 3.0%. On the other hand, mobile subscribers increased at a rapid pace of 4.2% during 2012, causing both services penetration trend to ultimately reverse.

In 2016, 32.5% of Canadian households subscribed to mobile services only and 11.4% of households subscribed to landline services only. As mobile and landline service take-up fluctuated, revenues reflected the change. Throughout 2012 to 2016, mobile revenues increased 4.5% annually (2017 CMR, Table 5.5.1) and landline revenues decreased by 5.6% annually (2017 CMR, Table 5.2.1). During this period, mobile revenue growth outpaced subscriber growth. Mobile data revenues generated much of the growth as they increased at an average rate of 15.2% each year between 2012 and 2016 (2017 CMR, Table 5.5.2). From 2015 to 2016 alone, average data usage per subscriber increased 24.9% (2017 CMR, Table 5.5.6), generating greater revenues per subscriber in addition to an increase in mobile subscriptions. For more insight on consumer spending habits, refer to the Canadian communications service expenditures section below.

Link directly to Subscriptions by income quintile Subscriptions by income quintile

Long Description

	First income quintile	Second income quintile	Third income quintile	Fourth income quintile	Fifth income quintile
	Household income less than $32,090	Household income from $32,091 to $55,470	Household income from $55,471 to $85,336	Household income from $85,337 to $130,045	Household income over $130,046
Average annual income	$19,559	$43,436	$70,178	$104,533	$219,031
Average members per household	1.47	2.01	2.51	3.00	3.36
Average annual communications expenditures	$1,681	$2,211	$2,732	$3,062	$3,687
Communications expenditures as a percentage of annual income	8.6%	5.1%	3.9%	2.9%	1.7%

Download source on Open Data

The data on telephone subscriptions by income quintile (see Table 1.2 on Open Data) illustrate different consumption patterns in higher- and lower-income households. While more than 99% of Canadian households have telephone service, just 3% of Canada’s highest-income households rely solely on a landline, compared to almost 30% of the lowest-income households. 40% of low-income households subscribe to mobile service only, as do about a quarter of the highest-income households.

In 2016, of the five income quintiles, households in the third quintile changed their telephony habits the most. Their exclusive use of mobiles increased at a rate of 31.4%, while landline-only households in this income quintile decreased at a rate of 28.1%. The fourth income quintile changed their telephony habits the most when it came to using a landline exclusively, showing a decreasing rate of 42.4% in 2016.

Financial resources appear to play a role in whether households subscribe to both mobile and landline services, or only one of the two. 27.1% of households in the highest-income quintile subscribed to only one of landline or mobile service in 2016, compared to 69.5% in the lowest-income quintile.

Link directly to Subscriptions by province Subscriptions by province

Subscriptions by population

In 2016, 98.5% of Canadians were covered by long-term evolution (LTE) networks, and most provinces had over 95% coverage. Saskatchewan and the North had the least coverage, at 86.2% and 63.5%, respectively (2017 CMR, Table 5.5.15). Even then, Saskatchewan had one of the highest penetration rates^{Footnote 4} (83.8%), incomparable to that of the North with the lowest penetration rate of 64.5% (2017 CMR, Table 5.5.15). Although LTE coverage is largely available in most regions, Alberta led in terms of mobile penetration with 91.5% of the population subscribing to mobile services (2017 CMR, Table 5.5.15). Prince Edward Island led in terms of coverage but had the lowest penetration rate of the provinces (72.4%), demonstrating that the availability of a network in a certain region has limited impact on the penetration rate.

Subscriptions by household

While a majority of Canadians had access to LTE networks, and 87.9% of these individuals subscribed to mobile services, Eastern provinces (New Brunswick, Nova Scotia, Prince Edward Island, and Newfoundland and Labrador) and Quebec continued to have more landline service subscribers than Western provinces (Manitoba, Saskatchewan, Alberta, and British Columbia) and Ontario (see Table 1.3 on Open Data). Furthermore, there were more mobile-only households in the four Western provinces and Ontario than in Quebec and the Eastern provinces, even though LTE was available to a greater percentage of population in Eastern provinces (2017 CMR Table 5.5.15). New Brunswick had the highest percentage of landline-only households (16.9%), and the lowest percentage of households with mobile service (82.5%). Households in Newfoundland and Labrador were the most reliant upon landlines – 85.1% had landlines and just 14.2% had mobile service only. In contrast, 38.1% of Alberta households relied on mobile service alone, and only 61% had landlines. Overall, the sizable coverage of almost 96% of Canadians, with two or more networks, grants Canadians the flexibility and options when making communications services subscription decisions.

Link directly to Internet subscriptions and computer ownership Internet subscriptions and computer ownership

98% of Canadians households have access to fixed broadband internet access and more than 87%^{Footnote 5} of Canadians households have a home Internet subscription. In 2016, Internet use from home increased slightly in all income quintiles except the fifth quintile, an overall average increase of 0.6%, (see Table 1.4 on Open Data). The vast majority of high-income households subscribed to Internet services in 2016, compared to less than two thirds of the lowest-income households. Internet use from home in the first income quintile is 22.2 percentage points lower than the overall average of 87.4% and 17.5 percentage points lower than in the second income quintile.

With mobile devices such as smartphones and tablets, Canadians can access the Internet from nearly any location. However, home computers still play an important role for Canadians. As Table 1.4 on Open Data shows, most Canadian households have home computers (84.1%).

Overall, slightly more households owned mobile phones (87.9%) than home computers (84.1%) in 2016. This trend is more pronounced in the lower income quintiles. For example, 85.6% of Canadian households in the second income quintile owned mobile phones (see Table 1.2 on Open Data), compared to 78% of households that owned home computers. Home computer ownership for all income quintiles declined by 0.4% between 2015 and 2016. The only growth in home computer ownership in the household is seen in the first income quintile, where it increased by 3.2%.

Link directly to iii. What do Canadian households spend on communications services? iii. What do Canadian households spend on communications services?^{Footnote 6}

Long Description

• Average monthly household communications spending in 2016 was $222.83.
• Canadians spent an average of $92.08 per month on mobile services, followed by $53.75 per month on television distribution services.

Distribution of the average household communications spending:

Landline	12%
Mobile	41%
Internet	22%
Television distribution	24%

• Spending as a percentage of income 2.90%
• Average annual household income in Canada $91,347.40

Households make decisions about the amounts they are willing to spend on communications services, with spending habits varying for many different reasons. Some habits reflect personal choice and others are influenced by service availability, affordability, and household resources. This section focuses on household spending for various services by income, household location (urban/rural), and age, to inform a better understanding of Canadian households’ expenditure habits.

Data on communications services spending provides insights on how communications services affect the household budget, but there are limitations when using expenditure data to assess adoption and spending patterns. The data do not reflect consumption of free services, such as over-the-air television and radio services, that remain valuable to many Canadians. The data presented here report average expenditures and so take into account all households, including those that do not subscribe to any services. As a result, the average expenditures may over-report or under-report actual spending for individual households. Most communications subscriptions, like those for television distribution, landline, and Internet services, tend to be purchased at a household level (and often in a bundle)^{Footnote 7}, meaning that there is a single subscription per household. However, larger households may have higher expenditures for these services (e.g. purchasing more Internet data or a broader selection of television channels). With mobile services, households may have several subscriptions. The data presented here do not allow for analysis of individual expenditures on communications services.

Statistics Canada reported that the average annual household income before taxes in Canada in 2016 was $91,347, and income increased in all income quartiles. The changing income ranges reflect changes in the economy as well as yearly inflation. In 2016, the Canadian provincial average annual household income before taxes ranged from $73,404 (Prince Edward Island) to $129,102 (Alberta).

Throughout 2016, the average Canadian household spent $222.83 per month on communications services, an increase of $4.41 (2.02%) from 2015 (see Table 1.5 on Open Data). As in 2015, Internet and mobile services drove household expenditure growth and telecommunications industry revenues (see Figure 1.4). Also in 2016, expenditures on Internet services continued to lead in terms of annual growth (6.5%), followed by expenditures on mobile services (5.5%). These increases occurred as consumers shifted to services offering higher Internet speeds and more mobile data (see section 5.3 in the 2017 CMR for more details on Internet services and section 5.5 for more details on mobile services).

Link directly to Expenditures by income quintile Expenditures by income quintile

Long Description

		Landline	Mobile	Internet	Television distribution	Total
First quintile (household income less than $32,090) Average income: $19,559	Monthly expenditures	$22.75	$47.42	$32.17	$37.75	$140.09
	Annual expenditures	$273	$569	$386	$453	$1,681
	Annual expenditures as % of average income	1.4%	2.9%	2.0%	2.3%	8.6%
Fifth quintile (household income over $130,046)	Monthly expenditures	$33.25	$141.00	$61.92	$71.08	$307.25
	Annual expenditures	$399	$1,692	$743	$853	$3,687
Average income: $219,031	Annual expenditures as % of average income	0.2%	0.8%	0.3%	0.4%	1.7%

See Table 1.6 on Open Data for data of all quintiles.

In 2016, consistent with previous years, household expenditures on communications services represented 8.6% of the average income of households in the first quintile, two percentage points more than their average expenditures on recreation^{Footnote 8} (6.6%) and slightly more than their average expenditures on clothing (8.0%).

While there is considerable variance between the average amount spent by Canadians in each income quintile, households tend to devote a larger amount of their communications service budget to either mobile or television distribution services. On average, household spending on television distribution services decreased by 1.4% from 2015 to 2016, while average household spending on landline telephone services decreased by 8.8% during the same period. Similar to previous years, household spending on mobile, Internet, and overall communications services continued to grow in 2016.

Overall, households spent the most on mobile services ($92.08 per month on average; see Figure 1.4). On average, for all income quintiles, spending on landline services declined from 2012 to 2016 at a compound annual growth rate (CAGR) of -7.4%. However, average expenditures on Internet services for all income quintiles show the largest growth (6.5%) between 2015 and 2016, and the highest 2012 to 2016 CAGR (7.9%) (Table 1.5 on Open Data).

Households in the highest income quintiles spent more on communications services than those in the lower quintiles. Household expenditures increased across all quintiles between 2015 and 2016, with those in the third income quintile increasing the most (3.5%).

Even though total spending on communications services by lower-income households was less than that by higher-income households, as shown in Table 1.7 on Open Data, expenditures on communications services took up a significantly larger percentage of their annual incomes.

Link directly to Average monthly expenditures by location - urban centresFootnote vs. rural communities Average monthly expenditures by location - urban centres^{Footnote 9} vs. rural communities^{Footnote 10}

Long Description

Year	Average monthly spending by households in rural communities	Average monthly spending by households in urban centres
2016	$227.83	$218.25
2012	$198.67	$193.75

Infographic – Highest vs. lowest (urban)

	Total	Landline	Mobile	Internet	Television distribution
High	Alberta	Newfoundland and Labrador	Alberta	Alberta	Alberta
	$272.58	$42.83	$128.69	$55.08	$67.50
Low	Quebec	Alberta	Quebec	Quebec	Quebec
	$169.94	$21.31	$56.14	$37.08	$48.72

Infographic – Highest vs. lowest (rural)

	Total	Landline	Mobile	Internet	Television distribution
High	Saskatchewan	Newfoundland and Labrador	Alberta	Prince Edward Island	Manitoba
	$282.17	$53.08	$121.17	$58.83	$77.83
Low	Quebec	British Columbia	Quebec	Quebec	Quebec
	$181.00	$34.00	$53.42	$36.42	$54.08

As seen in Figure 1.5 and Table 1.5 on Open Data, expenditures on mobile and Internet services increased from 2012 to 2016, landline service expenditures decreased, and television distribution service expenditures remained relatively stagnant. Internet expenditures in urban centres surpassed landline service expenditures in 2012, whereas in rural communities (see Figure 1.6), this occurred in 2014. Further, mobile service expenditures were fairly similar to television distribution service expenditures in rural communities during 2012 and 2013, but more was spent on mobile services in recent years.

Although households in urban centres spent the most on mobile services, those in rural communities had an overall higher total spending of $227.83 per month on communications services from 2012 to 2016. Urban centre household expenditures trailed closely at $218.25. The slight difference in average household expenditures between urban and rural communities reflects the slightly higher prices offered in rural areas, where there are typically fewer service providers.

Expenditures also varied by province. For instance, Quebec residents spent the least on all services except for landline in both urban and rural communities (see Table 1.8 on Open Data and Table 1.9 on Open Data). On the other hand, Alberta residents in urban centres spent the most on all services except for landline services. Overall, the highest total monthly service spending in urban centres and in rural communities was in Alberta ($272.58) and Saskatchewan ($282.17), respectively.

Link directly to Expenditures by age Expenditures by age

Long Description

• Younger households (reference person aged 30 or younger^{Footnote 11}) spent about $203.92 per month on communications services in 2016.
• Older households (reference person aged 65 or older) spent about $182.33 per month on communications services in 2016.

Data on household spending by age is segmented based on the age of the household’s reference person, a person who typically handles financial matters in the home. Households whose reference person is aged 40 to 54 spent the most on communications services ($257.75 per month), while those with reference persons aged 65 years or over spent the least ($182.33 per month).

In all but the oldest households, Canadians’ smallest communications expense is for landline services (Figure 1.7), the services with the biggest age-related differences in household expenditures. Although landline subscriptions are declining annually (as seen in Figure 1.2), landlines remain important for Canada’s older households. While younger households spent just $6.00 per month on average on landline services (an average expenditure that includes many households that do not have a landline), the oldest households spent on average almost seven times that amount ($40.92 per month).

This difference between age groups is also reflected through their usage habits. Older households (whose reference person 65 years or over) spend the most on television distribution services, and the least on Internet services. Typically, the younger generation (whose reference person under 30 years old), which watches an average 20.5 hours of TV per week, spends on average $30.50 a month on television distribution services. This spending is approximately 50% lower than the oldest generation, which watches on average 42.8 hours per week and spends $60.83 per month on TV (2017 CMR, Table 4.2.11). Figure 1.8 is comparable to Figure 1.7 showing how the trend for mobile, Internet, and landline are fairly similar for both expenditures and percentage of users per age group.

Figure 1.7 illustrates stark differences in spending between the youngest and oldest households. The youngest households tend to spend much more on Internet and mobile services than their older counterparts. 97% of the surveyed youngest generation used mobile services and allocated a very large portion of their spending towards it ($114.50 per month). A similar pattern is visible with Internet services. The correlation between spending and usage suggests that different services hold varying levels of importance to each generation and that these individuals spend more on services that they tend to use the most.