Canada’s Big Three end uneasy 2016 with flourish
• Voracious demand for wireless services propelled Canada’s Big Three providers to a strong finish in 2016 despite competitive pressures that dampened results in the television and Internet markets.
Telecommunications giants BCE Inc., Rogers Communications Inc. and Telus Corp. added more than 844,000 wireless subscribers last year, pulling in an extra 292,000 subscribers in the fourth quarter alone, according to financial reports released over the past month.
Telus, the last of the Big Three telco to release its results, reported higher quarterly revenue Thursday thanks to a growing base of data- hungry wireless subscribers.
But higher costs to attract customers and a one- time $305 million payment to employees dampened its fourthquarter profit. The company’s profit of $ 87 million or 14 cents per share for the three months ending Dec. 31 was down 67 per cent from the same period last year, Telus reported.
The top three players, which control 90 per cent of the country’s market share, all boasted increased revenue per user for both the quarter and the year, an important industry metric that indicates how much customers pay for their monthly subscriptions.
Bell added the most subscribers, followed by Rogers with Telus in third. Analysts reacted positively to their financial results even though the cost of signing up new customers and keeping existing ones went up amid more aggressive promotional activity in the holiday season.
“At the end of the day, to see strong performance for the industry is a good thing for investors,” Telus chief executive Darren Entwistle said in a call with analysts. Telus was the last to release its results.
As for Telus’ market position, Entwistle said he was comfortable with it since he places more importance on adding high quality customers, not just volume.
He credited the overall market growth to population growth due to immigration, multiple phones per person and more tablets for the growth. He also pointed to people substituting land lines with mobile phones for a home line.
Ultimately, the average revenue per user bump came from a higher portion of the customer base choosing plans with larger data buckets or buying data add- ons when they run out before the end of the month, Entwistle said, echoing executives from Bell and Rogers.
“Such is the insatiable appetite people have for data applications,” he said.
His comments come as the federal telecom regulator, the Canadian Radio- television and Telecommunications Commission, debates updates to the wireless code amid concerns about data overage fees. Nearly half of Canadians (46 per cent) had to pay extra fees for blowing their data limits next year, according to a CRTC survey.
The regulator has questioned wireless providers about data policies for multiuser plans, along with issues related to unlocking fees.
Meantime, the Big Three l ost a collective 16,000 television customers and 504,000 telephone customers last year. Television cord cutting accelerated from 2015, when the big three gained 68,000 television customers on the strength of the telcos Internet protocol TV products, whereas fewer people axed their phone lines compared to 584,000 the previous year.
Given the growth in videostreaming services such as Netflix, researchers expect television cord- cutting to hit between 190,000 and 200,000 for 2016 when including other providers, including large players Shaw Communications Inc. and Quebecor Inc.
Internet, the other big bet for growth as Canadians hook up more devices to the web, grew by 250,000 subscribers in 2016, down from 283,000 in 2015.