Canada Primes for a Mobile Data Gold Rush

March 10, 2010

Canada is fundamentally different from the US, even though innovation and trends often spill over from the US, which in many ways overshadows its northern neighbor. For one thing, having one of the world’s lowest population densities matters. Because Canada’s 30m people inhabit an area second only to Russia, many rural communities lack fixed telecom infrastructure. This makes the opportunity ripe for mobile broadband to thrive. For more about the Canadian market, see Canada: Mobile Data is Main Opportunity for Revenue Growth, a Country Intelligence Report released by Pyramid Research last week.

With a mobile subscription penetration rate of 68% of the population, Canada represents a sizable opportunity compared with other mature economies, where penetration rates uniformly exceed 90% and are usually well over 100% (see exhibit). More than 10.7m Canadians are without mobile service, but we expect nearly 90% to use mobile networks by 2014.

Exhibit X: Mobile penetration of population in select developed markets, 2009

Source: Pyramid Research Mobile Data Forecasts, Q4 2009

Growth drivers include smartphone demand, development and promotion of 3G+ networks, and increased competition created by new entrants. Mobile broadband network developments being facilitated in the market include:

• In 2008, in addition to the spectrum won by the three major players, Rogers, Bell, and Telus, 15 new players won AWS spectrum that covers 40% of the population, and we expect several to launch LTE with a broadband strategy that targets rural customers.
• In 2009, Rogers became the first mobile operator in North America to roll out HSPA+, claiming speeds up to 21Mbps; it will be offering LTE in test markets this year.
• Bell and Telus have joined forces to migrate their networks and customers from CDMA/EVDO to HSPA. We expect them to launch LTE in 2012.
• Many regional operators have launched WiMAX networks, including Sogetel, MDS Wireless, ABC Communications, MetroBridge Networks, Craig Wireless, Primus Telecommunications and Mipps.

— Daniel Locke, Senior Analyst

Related content:

Canada: Mobile Data Is Main Opportunity for Revenue Growth
Country Intelligence Report published March 2010
The Canadian communications market, including traditional pay-TV, generated $37.5bn in 2009, a year-over-year decrease of 1.5% that resulted from the economic downturn and decreases in the market for fixed and mobile voice services. Going forward, we expect the market to grow at a CAGR of 2.8% from year-end 2009 to year-end 2014, reaching $43.1bn in 2014. We estimate that mobile data will be the fastest growing segment with a CAGR of 24.2% from 2009 to 2014 when it will generate $7.7bn up from $2.6bn in 2009. This Country Intelligence Report analyzes Canada’s communications, media and technology industries, including key trends, regulatory pressures and the competitive landscape, making it an excellent complement to our Forecast products.

North America Mobile Data Forecasts
Forecasts published quarterly
Our Mobile Data Forecast products provide complete pictures of demand trends for Canada and the US. The Excel output includes five years of historical data and five years of market projections for metrics such as penetration, mobile subscriptions (by type of package, by operator or MVNO and by network technology), users of specific data services (SMS, music, etc.), MOU, ARPS (by operator, by subscription type, by service, by application) and revenue (by messaging and non-messaging applications). The Forecasts are based on extensive field research and use a consistent methodology, aiming to capture the total spending on mobile data services in each market. Data from these Forecasts is available online for subscribers to our DataTracker service.

WiMAX and LTE: The Case for 4G Coexistence
Research Report published January 2009
The hype around WiMAX is dissipating, but we believe there remain decisions to be made WiMAX around the wireless standard. This report analyzes the existing WiMAX operations worldwide, evaluating operator business models, WiMAX economics, services, the value proposition and the overall market opportunity relative to HSPA and LTE. The objective is to assess which technology deliver the most profitable and popular mobile voice, broadband and video services in the context of specific market conditions: case studies examine UQ Communications (in Japan), Clearwire (the US), Mobily (Saudi Arabia), Digicel (Caribbean), Tata (India), Umniah (Jordan) and Yota (Russia).

North America Mobile Handset Forecasts
Mobile Handset Forecast published quarterly
Our Mobile Handset Forecast products provide a complete picture of handset sell-through in the US and Canada. The Excel output includes five years of historical data and five years of market projections for metrics such as total handset sales, handset sales by network technology, new handset sales (by technology, by technology generation, by feature set), smartphone handset sales, vendor market share and handset ASP. We believe our Handset Forecasts are superior because they capture sell-through (units sold to end users) rather than unit shipments (sales from manufacturers to distributors) and rely heavily on our Mobile Demand Forecasts. Moreover, they are based on extensive field research, and a consistent methodology that is applied to all markets. Data from these Forecasts is available online for subscribers to our DataTracker service.