Communications Monitoring Report 2019
Communications Industry Overview: Telecommunications and Broadcasting
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- Financial performance
- Industry characteristics
|Revenues||$53.1 B||$17.1 B||$70.2 B|
|Share of total communications revenues||75.6%||24.4%||100%|
|Growth rate 2017-2018||5.5%||-1.2%||+3.8%|
This section provides an overview of the communications industry and highlights pertinent revenue trends and key industry characteristics over the 2014 to 2018 period. The communications industry encompasses both the broadcasting and telecommunications market sectors. The data presented in this section is from CRTC sources.
In 2018, the communications industry accounted for $70.2 billion in revenues (see Figure 3.1).Footnote 1 This represents a growth rate of 3.8% over 2017, and an average annual growth of 2.3% since 2014. The growth came exclusively from the telecommunications sector which grew 5.5% from 2017 to 2018 while broadcasting revenues decreased by 1.2% during the same period. The telecommunications sector represents over three quarters of overall communications revenues
More information, including market financial performance, ownership landscape data, and pricing information for rural and urban centres across the country, can be found in the Telecommunications and Broadcasting sections of the 2019 Communications Monitoring Report (CMR).
As seen in Figure 3.1 telecommunications revenues consistently increased from 2014 to 2018, while broadcasting revenues gradually decreased over the same period (see Figure 3.1 and Figure 3.2).
As seen in Figure 3.2 below, telecommunications and broadcasting revenue growth rates began following opposite trends in 2017, widening in 2018 - the revenue growth gap stood at 6.5 percentage points in 2017, and 6.7 percentage points in 2018.
|Atlantic Provinces||$4.3 B|
|British Columbia and the North||$8.9 B|
This infographic excludes revenues generated from discretionary and on-demand television services as well as direct-to-home (DTH) BDU services (i.e. satellite television) (henceforth referred to as DTH BDU services), because those services are licensed as national services. Those services generated $4.2 billion and $1.9 billion, respectively, in 2018. Estimates were made for companies that were not required to provide provincial and territorial telecommunications data.
The communications industry served over 14 million households and over 1 million businesses in Canada using both landline and wireless facilities. Over 60%, or $38.5 billion, of all communications services revenues, excluding revenues generated from discretionary and on-demand television services, as well as from DTH BDU services, were generated in the provinces of Ontario and Quebec which represent approximately 38% and 23% of the Canadian population, respectively. Ontario accounted for 40% of national revenues, leading the country with the highest revenues.
In terms of the revenue market share, Figure 3.3 shows that at 44% incumbent TSPs’ telecommunications revenues account for the largest share of communications revenues, followed by cable-based carriers’ telecommunications revenues at 25%.
From 2014 to 2018, total telecommunications and broadcasting distribution revenues from cable-based carriers and incumbent TSPs, as a percentage of total communications revenues, remained stable at approximately 33% and 49%, respectively. During that period, cable-based carriers’ telecommunications revenues increased on average by 5.9% annually, from $14.2 to $17.8 billion. However, during the same period, other facilities-based TSPs’ telecommunications revenues had the highest growth, with revenues increasing by an average of 18.3% annually, from $1.2 billion in 2014 to $2.4 billion in 2018. BDU revenues for cable-based carriers and television and radio revenues continued to decrease year-over-year, with an average five-year decline of 3.6% and 1.6%, respectively.
Availability of wireline and wireless services continues to increase and provides faster telecommunications services to Canadians. In 2018, 44% of households had access to Fibre-to-the-home (FTTH) services while 86% of households had access to Internet services with speeds of 50/10 Mbps with unlimited data and 95% of the population were covered by Long-Term Evolution Advanced (LTE-A) networks. More statistics and breakdowns are available in the Retail Fixed Internet and Broadband Availability and Retail Mobile Sector sections of this report.
Over the past five years, the average growth for wireless data plan subscriptions and Internet residential subscriptions (9.8% and 3.3%, respectively) outpaced the population growth and household formation, which stood at 1.2% on average per year, from 2014-2018. During this same period, wireline telephone and BDU subscriptions decreased by 4.2% and 1.2% on average per year, respectively.
iii. Financial performance
Revenues from the top five ownership groups (Bell, Quebecor, Rogers, Shaw, and TELUS) accounted for approximately 85% of total communications revenues in 2018 (unchanged from 2017), compared to 82% in 2014. While the share of revenues from the top five entities has changed over time, the composition of the top five has remained relatively stable.
Three of the top five groups are cable-carriers (Rogers, Shaw, and Quebecor), while the remaining two are incumbent TSPs (Bell and TELUS).
As illustrated in Figure 3.7, cable-based carriers’ wireline telecommunications services are generating an increasingly important share of total revenues. In 2018, wireline telecommunications revenues represented the largest portion (63%) of cable-based carriers’ total revenues.
|Wireline telecommunications revenues||6.6||6.8||7.1||7.4||7.8|
|Wireline telecommunications revenues as a percent of total||56%||57%||60%||62%||63%|
This figure compares cable-based carriers’ wireline revenues from two principle sources: basic and non-basic programming services (i.e. revenues from the distribution of television services), and wireline telecommunications services (i.e. local, long distance, data, private line, and Internet) between 2014 and 2018. This figure excludes revenues from satellite-based BDU and mobile services.
As seen in Figure 3.8, from 2016 to 2018, earnings before interest, taxes, depreciation, and amortization (EBITDA) margins for other service providers stabilized and margins increased slightly for all three types of carriers. However, EBITDA margins of other service providers are almost half of those of incumbent TSPs and cable-based carriers.
iv. Industry characteristics
The communications industry is comprised of the telecommunications and broadcasting sectors with revenues from telecommunications services accounting for the larger share. This section observes service providers’ revenues from each sector.
|Percentage of cable-based carriers’ revenues from telecommunications services||70.3%||77.5%|
|Percentage of incumbent TSPs’ revenues from broadcasting distribution services||9.2%||9.5%|
As seen in the infographic above, the majority of cable-based carriers’ revenues is derived from telecommunications services and the ratio has increased over the 2014 to 2018 period (see Open Data).
The portion of incumbent TSPs’ revenues from broadcasting services has been quite small and has increased only slightly over the 2014 to 2018 period. Overall, the infographic illustrates a relevant measure of industry convergence.
As shown in Table 3.1, three entities offered services in all 10 sectors of the communications industry: radio, television, BDU, discretionary and on demand television, local and access, long distance, Internet, wireless, data and private line. In 2018, these three entities generated 62% of communications revenues. In contrast, the 206 providers which offered only one service, generated only 2% of communications revenues.
The communications industry remains highly concentrated. Nine to ten companies operating in eight or more sectors account for approximately 90% of communications revenues.
|Number of sectors in which companies offer service||Number of reporting groups or entities operating in these sectors||Percentage of broadcasting and telecommunications revenues generated in these sectors|
Source: CRTC data collection
Grouping of companies by ownership
For reporting purposes, some metrics utilize company groupings whereby revenues are aggregated across affiliated companies (e.g. see Figure 3.6 Share of total revenues, by broadcasting and telecommunications ownership group (%)).
The Atlantic Provinces include New Brunswick, Newfoundland and Labrador, Nova Scotia and Prince Edward Island. The North refers to the Northwest Territories, Nunavut and Yukon.
The Prairies include Alberta, Manitoba and Saskatchewan.
Nationally licensed services such as discretionary and on-demand television services as well as direct-to-home (DTH) broadcasting distribution unit (BDU) services (i.e. satellite television), are not included in regional breakdowns.
Estimates were made for companies that were not required to provide provincial and territorial telecommunications data.
The broadcasting sector consists of radio (private and CBC/SRC), conventional television (private and CBC/SRC), discretionary and on-demand television services (pay, pay-per-view [PPV], video-on-demand [VOD] and specialty services) and BDUs, such as cable, satellite and Internet Protocol television (IPTV) distributors.
The telecommunications sector includes local, long distance, data, private line, mobile and Internet services.
Broadcasting data collection
Statistical and financial data is sourced from annual returns provided by commercial and CBC/SRC radio stations, conventional television stations, discretionary services, and on-demand services for the broadcast year which ended August 31, 2018.
CBC/SRC revenues include parliamentary appropriations for conventional television.
Annual returns for the broadcast year ending 31 August 2018 were required to be filed with the Commission by 30 November 2018. Data received subsequent to the compilation date is not reflected in this publication. The data reported for previous years has been updated to reflect any additional or adjusted information received by the Commission after the 31 August date for prior years’ publications.
Pursuant to Broadcasting Regulatory Policy CRTC 2015-86, the term “discretionary services” now encompasses all currently licensed pay, specialty and discretionary services, while the term “on-demand service” now encompasses all licensed pay-per-view and video-on-demand services.
Media Technology Monitor (MTM)
MTM measures Canadians’ media technology adoption and use at two points in time to monitor changes in media penetration and use over the year. Telephone interviews are conducted with a regionally representative sample of Canadians who have a landline telephone service and those who rely solely on cell phone service. The fall survey includes 8,000 Canadian adults (4,000 Anglophones and 4,000 Francophones). Of those 8,000 respondents, 2,976 have also completed an online survey introduced in the fall. An independent sample of 4,000 Canadians (2,000 Anglophones and 2,000 Francophones) is surveyed in the spring.
The CMR uses data collected from the fall survey unless stated otherwise.
“Watching television on any platform” refers to any form of television viewership, regardless of the chosen television medium. This includes, but is not restricted to, BDU-subscribed television, private conventional television, and Internet-based television services. The content can be viewed on any platform such as tablets, cellphones, Internet-connected television, or any other device.
BDU revenues refers to revenues from basic and non-basic services and exclude Internet-based service revenues (e.g. Netflix) and telecommunications service revenues (e.g. Internet access or telephony) but include IPTV services (e.g. Bell Fibe and Telus Optik TV).
Broadcasting revenues include reported revenues for commercial services (private commercial radio, private commercial television, discretionary and on-demand services, and broadcasting BDU services such as cable, DTH and IPTV). Broadcasting revenues also include revenues from CBC radio and television services but exclude other non-commercial radio and television, and over-the-top (OTT) service data.
Cable-based carriers are former cable monopolies that also provide telecommunications services (e.g. wireline voice, Internet, data and private line, and wireless services). Examples of cable-based carriers include Rogers, Shaw, and Videotron.
Compound annual growth rate (CAGR) measures the average rate at which a value grows over a certain period of time assuming the value has been compounding over that time period.
Convergence refers to services that were previously separate, such as voice, data, audio and video, being distributed over the same network, to share resources and to interact with each other.
Direct-to-home (DTH) refers to satellite service providers.
Earnings before interest, taxes, depreciation and amortization (EBITDA) is a metric used to measure financial performance. EBITDA margin is expressed as a percentage of total revenues.
An Incumbent Telecommunications Service Provider (TSP) is a company that provides local telecommunications services on a monopoly basis prior to the introduction of competition. Examples of incumbent TSPs include Bell, SaskTel and TELUS. They also include small incumbent TSPs such as Sogetel and Execulink.
Internet protocol television (IPTV) refers to services such as Bell Fibe and Telus Optik TV, but excludes Internet-based services such as Netflix, Crave and Club Illico.
Other facilities-based carriers refers to providers of telecommunications services that are not incumbent providers but which own and operate telecommunications networks. Examples of other facilities-based carriers include Xplornet and Allstream Business.
A reserve refers to land set aside by the federal government through the Indian Act or through treaties for the use of a specific band or First Nation. The band council has "exclusive user rights" to the land, but the land is "owned" by the Crown. The Indian Act states that this land cannot be owned by individual band members.
Telecommunications revenues include reported revenues from local, long distance, data, private line, mobile and Internet services.
Wholesale-based service providers or non-facilities-based service carriers refers to companies that generally acquire telecommunications services from other providers and either resell those services or create their own network from which to provide services to their customers. A company that owns a small number of facilities but has the vast majority of its operations on leased facilities may also be classified as non-facilities-based. Examples of wholesale-based service providers and non-facilities-based carriers include Distributel and TekSavvy.
Contents of the Report
- Communications Services in Canadian Households: Subscriptions and Expenditures 2013-2017
- 2018 Communications Services Pricing in Canada
- Communications Industry Overview: Telecommunications and Broadcasting
- Broadcasting Overview
- Radio Sector
- Television Sector
- Broadcasting Distribution Sector
- Telecommunications Overview
- Retail Fixed Internet Sector and Broadband Availability
- Retail Mobile Sector
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|Report Section||Open Data|
|Communications Services in Canadian Households: Subscriptions and Expenditures 2013-2017||Households data|
|2018 Communications Services Pricing in Canada||Pricing data|
|Communications Overview||Communications Overview data|
|Broadcasting Overview||Broadcasting Overview data|
|Radio Sector||Radio data|
|Television Sector||Television data|
|Broadcasting Distribution Sector||BDU data|
|Telecommunications Overview||Telecommunications Overview data|
|Retail Fixed Internet Sector and Broadband Availability||Internet data|
|Retail Mobile Sector||Mobile data|
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