Canadian Radio-television and Telecommunications Commission
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CRTC Communications Monitoring Report
July 2011
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Acknowledgements
The Commission wishes to thank all the entities that completed the CRTC Data Collection forms, without which this report would not have been possible. The Commission would also like to acknowledge the assistance provided by (1) Industry Canada in the analysis of broadband deployment as it related to the rural communities in Canada; (2) Statistics Canada for the various supplementary data used in this report; (3) BBM Canada and BBM Nielsen Media Research for audience measures; (4) BBM Analytics for Media Technology Monitor (MTM) syndicated reports; (5) comScore, for assistance with the MyMetrix data; and (6) Mediastats.
Interested parties are welcome to provide comments for improvements or additions to future editions of the report. You can send your comments to the attention of the Secretary General, CRTC, Ottawa, K1A 0N2.
Executive summary
Approximately 98% of Canadian households are located within a 1.5 Mbps broadband footprint, consisting of either landline or mobile (i.e., HSPA+) facilities. On a provincial basis the footprint encompasses all households in the following 5 provinces: Alberta, Ontario, New Brunswick, Nova Scotia, and Prince Edward Island. For the remaining provinces it encompasses at least 89% of the households. With respect to Canada’s mobile network, 97% of Canadians are within the mobile broadband footprint.
Broadband penetration continues to increase. Seventy percent of households subscribe to 1.5 Mbps broadband Internet service in 2010 compared to 62% in 2009 and 52% subscribe to 5 Mbps service compared to 44% in 2009. With respect to mobile broadband, 39% of wireless devices are either handheld or dedicated devices that allow the user to access broadband services. Canada’s extensive broadband footprint provides Canadians with the means to actively participate in Canada’s digital economy and new media activities.
Communications service revenue growth
Canadian communications service revenues continued its year-over-year increase, going from $55.4 billion in 2009 to $57.4 billion in 2010, or by 3.6%. The growth was driven by the 8.9% increase in broadcasting revenues and the 1.8% increase in telecommunications revenues.
Broadcasting
Broadcasting revenues went from $14.4 billion in 2009 to $15.7 billion in 2010. The increase was due to revenue growth in all of the broadcasting sectors: 8.9% in BDU revenues, which increased from $7.4 billion to $8.1 billion; 11.1% in Pay, PPV, VOD and specialty service revenues, which increased from $3.1 billion to $3.5 billion; 9.9% in conventional television, including the CBC, which increased from $2.4 billion to $2.6 billion; and 2.9% revenue growth in radio revenues which increased from $1.5 billion to $1.6 billion.
Telecommunications
Telecommunications service revenues increased from $40.9 billion in 2009 to $41.7 billion in 2010, or by 1.8%. The increase was due to newer, or non-legacy data services, and broadband Internet and wireless service revenues which, collectively, increased from $25.0 billion in 2009 to $26.5 billion in 2010 or by 6.2%
Non-legacy data revenues increased from $1.7 billion to $1.8 billion, or by 8.2%. Internet service revenues increased from $6.5 billion to $6.8 billion, or by 4.2%. Wireless revenues increased from $16.9 billion to $18.0 billion, or by 6.6%. These increases were partially offset by the following decreases: -11% in long distance revenues, which went from $3.9 billion to $3.4 billion; -5.3% in legacy data and private line revenues, from $2.6 billion to $2.5 billion, and -2.7% in local and access revenues, from $9.4 billion to $9.1 billion.
The communications industry
In 2010, the five largest companies in the communication industry captured 83% of the industry’s revenues. The next five captured 9%. Collectively these companies have 92% of the revenues. Of the 11 markets1 in the industry, three companies offered services in all of these markets, representing 63% of the industry revenues. These companies are positioned to provide service bundles. In 2010, approximately 48% of residential customers subscribed to service bundles that consisted of local telephone service and one or more of the following services: Internet access, video, and mobile. Approximately 91% of telecommunications revenues were from TSPs operating in all of the telecommunications market sectors and 68% of broadcasting revenues were from companies operating in all of the broadcasting sectors.
Competition
The alternative TSPs’ share of total wireline telecommunications revenues remained relatively unchanged at 37% in 2010. The alternative TSPs’ market share included the incumbent telephone companies’ operations outside of their traditional territories. The incumbent telephone companies’ operations outside of their traditional operating territories decreased from 8% in 2009 to 7% in 2010, other facilities-based TSPs such as cable companies and hydro utility companies with telecommunications activities increased from 23% in 2009 to 25% in 2010, and resellers remained relatively unchanged at 6%.
The cable companies were major providers of high speed Internet service, as they had approximately 57% of high speed residential Internet subscribers in 2010. In 2005, these companies started to provide local telephone service generally over a managed IP network, and by year-end 2010, had captured approximately 31% of local residential lines to become major competitors of the incumbent telephone companies in residential markets.
The competitors of the incumbent telephone companies, which include incumbent telephone companies operating outside their traditional territories, maintained their share of telecommunications revenues. Competitors, essentially cable BDUs, had strong growth in their number of residential local lines, which increased by 15%. Competitor business lines increased 4%.
New wireless entrants collectively captured approximately 2% of the wireless subscribers and 1% of revenues in 2010. Overall, the new entrants stimulated the market as the number of wireless subscribers increased by 8.5% in 2010 compared to 7.8% in 2009. The average revenues per subscribers decreased 1.6%, from $58.81 to $57.86 in 2010 due in large part to the lower prices for service by new entrants.
Broadcasting
Radio
There were 1208 radio and audio services in Canada in 2010. Seventy-five percent of the radio and audio services were broadcast to English-language Canadians, 22% to French-language Canadians, and the remaining 3% to third-language Canadians.
National average weekly hours tuned per capita remained relatively unchanged at 17.6 hours in 2010. On a per-listener basis, average weekly hours tuned also remained relatively unchanged at 19.4 hours per listener.
Television
Overall viewing of Canadian programs on Canadian English-language services was 88% in 2010, while viewing of Canadian programs on French-language services remained relatively unchanged at 99%. While drama and comedy programs continued to be the most popular genre, it is predominantly of non-Canadian content. In 2010, 81% and 67% of English- and French-language drama and comedy programs were non-Canadian, respectively.
BDUs
In 2010, approximately 11.5 million or 91% of Canadian households subscribed to a BDU for television service, an increase of 2.5% over the previous year. Of those subscribing to BDUs, 25% subscribed to either a DTH provider or a MDS BDU. The top four cable BDUs and the two DTH providers captured 89% of all BDU subscribers in 2010.
BDU programming revenues per subscriber per month2 increased by $3.55 or 6%, to $59.73 in 2010.
New media broadcasting
A growing number of Anglophone and Francophone Canadians are adopting new media broadcasting. The adoption rates of Anglphones for video on demand, Internet video, and video on a cell phone are 15%, 51% and 9%, respectively and 17%, 49% and 4% respectively for Francophones. More Canadians are watching television programming online. Of those viewing online TV, Anglophones spend 2.6 hours per week and Francophones spend 1.5 hours per week in such an activity.
Anglophones that stream online radio, tend to do more streaming than their francophone counterparts. The anglophones spend 6.1 hours per week streaming audio compared to 5.3 hours for Francophones.
Telecommunications
The number of mobile phone subscribers increased 9% in 2010 from the previous year. As well, Canadians continued to embrace technologies including broadband access to the Internet as the number of residential subscribers to high speed Internet services increased by 5%. In 2010, approximately 70% of Canadian households had broadband Internet service and 74% had high-speed Internet service.
Newer data services that meet business customer requirements for increased speed, functionality, and cost-efficiency now represent 90% of data protocol revenues, with data services such as Ethernet and IP-based private networks having a combined revenue growth of 10% in 2010.
Data collection
The data compiled for this report was obtained from a number of sources. The majority of the data was collected using the Commission’s data collection survey forms. Broadcasting data was generally for the twelve-month period ending 31 August 2010 and telecommunications data was for the twelve-month period ending 31 December 2010.
The Commission collaborates with other government agencies and departments such as Statistics Canada and Industry Canada to minimize the reporting burden on the industry. The data collected for monitoring purposes is also used by Statistics Canada for its national system of accounts. Additional survey questions were added to meet Statistics Canada’s specific needs.
The Commission continues to work with Industry Canada to identify the availability of broadband Internet access service across all regions of Canada. The data, jointly collected, assists Industry Canada in its administration and monitoring of broadband deployment initiatives.
Table of Contents
1.0 Introduction
1.1 Purpose of the report
1.2 Data collection and outline of the report
2.0 The CRTC, policies, and regulation
2.1 The CRTC
2.2 Regulatory oversight of broadcasting and telecommunications
2.3 Contribution and spending regimes
3.0 The Communications service industry
3.1 Overview
4.0 Broadcasting
4.1 Broadcasting - Financial review
4.2 Radio market sector
4.3 Television market sector
4.4 Broadcasting distribution market sector
4.5 New media market sector
5.0 Telecommunications
5.1 Financial review
5.2 Wireline voice market sector
5.3 Internet market sector and broadband availability
5.4 Data and private line market sector
5.5 Wireless market sector
6.0 International perspective
6.1 How Canada compares internationally
Appendix 1 Data collection and analysis
Appendix 2 Classification of Canadian TSPs
Appendix 3 Status of local forbearance - residential and business exchanges
Appendix 4 International pricing assumptions
Appendix 5 Telecommunications market sector description
Appendix 6 List of acronyms used in the report
Appendix 8 List of companies referenced in the report
List of diagrams
Diagram 4.0.1 Program Distribution
List of tables
Table 2.2.1 Broadcasting complaints by sector, by issue
Table 2.2.2 Number of contacts by public
Table 2.2.3 Complaints handled by the CBSC
Table 2.2.4 Complaints handled by the ASC
Table 2.2.5 Number of dispute files received in 2010/2011
Table 2.2.6 Number of broadcasting dispute files received in 2010/2011
Table 2.3.1 LPIF – Contributions and number of recipients
Table 3.1.1 Communications revenues ($ billions)
Table 3.1.2 Industry revenues by type of provider
Table 3.1.3 Industry convergence: Cable v. Telecommunications
Table 4.1.1 Broadcasting revenues
Table 4.1.2 Percent of broadcasting revenues generated by companies operating in multiple markets
Table 4.2.1 Number and type of radio and audio services authorized to broadcast in Canada
Table 4.2.3 Average weekly hours tuned per capita by age group
Table 4.2.5 Fall tuning achieved by the largest private commercial radio operators in Canada
Table 4.2.8 CBC radio revenues
Table 4.2.10 Revenues for Type B Native, community, and campus radio stations
Table 4.2.12 Summary of annual CCD contributions reported by radio licensees
Table 4.3.1 Number and type of television services authorized to broadcast in Canada
Table 4.3.2 National average weekly viewing hours, by age group
Table 4.3.10 Television revenues by type of service
Table 4.3.12 Advertising and other revenues: Private conventional television stations
Table 4.3.13 Revenues: Pay, PPV, VOD and specialty analog and digital services
Table 4.3.16 Canadian Programming Expenditure (CPE) - Private conventional television
Table 4.3.17 Expenditures on non-Canadian programming - Private conventional television
Table 4.3.19 Canadian programming expenditures (CPE) reported by the PPV and VOD services
Table 4.3.20 Number of hours of Canadian priority programming broadcast annually - 7 p.m. to 11 p.m.
Table 4.4.2 Top Canadian distributors and number of subscribers (thousands)
Table 4.4.3 Number of subscribers receiving digital services
Table 4.4.4 Number of cable undertakings contributing to community channels
Table 4.5.1 Website visits by Canadian unique visitors
Table 4.5.2 Canadian Internet usage by linguistic group
Table 4.5.3 Average weekly hours spent online by Canadians Internet users
Table 4.5.4 Adoption and growth rate of various video technologies in Canada
Table 4.5.5 Adoption and growth rates of various audio technologies in Canada
Table 4.5.6 Time spent by Canadian adopters using various technologies
Table 5.1.1 Retail and wholesale telecommunications revenues
Table 5.1.2 Telecommunications revenues, by market sector
Table 5.1.5 Total telecommunications revenues, by type of service provider
Table 5.1.6 Wireline telecommunications revenue market share (%), by type of service provider (2010)
Table 5.1.7 Percent of revenues from forborne services
Table 5.1.8 Canadian penetration rates – Wireline and wireless subscribers (per 100 households)
Table 5.1.10 Monthly household telecommunications expenditures (2009) – Wireline and wireless
Table 5.1.11 Number of connections
Table 5.1.12 Percent of subscribers with local service bundled with other services
Table 5.1.13 Capital expenditures, by type of TSP
Table 5.2.1 Local and access and long distance revenues, local lines, and long distance minutes
Table 5.2.2 Local and access and long distance forborne revenues and lines (Percent)
Table 5.2.3 Local and access and long distance revenues, by service category
Table 5.2.4 Local and access revenues, by type of TSP
Table 5.2.5 Local & access lines by type of TSP, by type of TSP
Table 5.2.6 Local and long distance retail monthly revenues per line
Table 5.2.7 Local and access retail monthly revenues ($) per line by type of TSP
Table 5.2.8 Incumbent TSP provincial retail local market share, by line
Table 5.2.9 Incumbent TSP residential and business local market share, by line for major centres
Table 5.2.10 Local wholesale revenues, by major component
Table 5.2.11 Long distance revenues, by type of TSP
Table 5.2.12 Long distance retail revenues per minute, by type of TSP
Table 5.2.13 Large incumbent TSPs’ retail long distance revenue market share, by region
Table 5.3.2 Residential Internet subscribers, by type of TSP
Table 5.3.3 Residential Internet plans and pricing
Table 5.3.4 Key telecommunications availability indicators
Table 5.3.5 Number of households that can have broadband access
Table 5.3.6 Broadband availability, by speed and province (2010, percentage of households)
Table 5.3.7 Connected buildings with DS3 connections or higher in 32 major centres, by province
Table 5.4.1 Data and private line revenues
Table 5.4.2 Data protocol revenues, by service category
Table 5.4.3 Data protocol revenue market share, by service category (%)
Table 5.4.4 Private line revenues, by service category
Table 5.4.5 Private line - Short-haul and long-haul revenue market share (%)
Table 5.5.1 Wireless and paging revenues and number of subscribers
Table 5.5.2 Wireless and paging revenue components
Table 5.5.3 Prepaid and post paid wireless revenues (basic voice and long distance)
Table 5.5.4 Wireless subscriber market share, by province
Table 5.5.5 ARPU, by province (excluding paging)
Table 5.5.6 Average monthly churn rates (percent)
Table 5.5.8 Canadian wireless monthly service rates - incumbents v. new entrants (2010)
Table 5.5.9 Canadian wireless monthly Internet service rates - incumbents v. new entrants (2010)
Table 6.1.1 International pricing (average price ($) per month)
Table 6.1.2 Average advertised Internet speeds (Mbps) across OECD countries, by technology
Table 6.1.3 Global shipments of mobile phones, 2010
Table 6.1.4 Wireless industry metrics, 2010
Table 6.1.5 Radio industry metrics, 2009
Table 6.1.6 Television industry metrics, 2009
List of figures
Figure 2.3.1 2010 Contributions to CCD reported by commercial radio & audio services
Figure 2.3.2 2010 Television CPE
Figure 2.3.3 2010 BDU contributions to Canadian programming and local expression
Figure 2.3.4 LPIF distribution by region and owner group
Figure 2.3.5 Subsidy paid to LECs and the revenue percent charge
Figure 3.1.1 Broadcasting and telecommunications annual revenue growth rates
Figure 3.1.2 Number of services received in the home, by service provider (Anglophone market 18+)
Figure 3.1.3 Number of services received in the home, by service provider (Francophone market 18+)
Figure 3.1.5 Broadcasting and telecommunications revenues by type of provider (2010)
Figure 3.1.7 BDU revenues, by service type
Figure 3.1.10 Broadcasting and telecommunications operating platforms
Figure 3.1.11 Regulatory considerations in a converging industry
Figure 4.1.2 Commercial radio revenues, by broadcaster
Figure 4.1.3 Commercial television revenues, by broadcaster
Figure 4.1.4 BDU revenues, by operator
Figure 4.1.5 Total broadcasting revenues and PBIT/EBITDA margins
Figure 4.1.6 Canadian advertising revenues
Figure 4.2.1 Type of radio and audio services authorized to broadcast in Canada (2010)
Figure 4.2.2 Radio tuning share in an average week
Figure 4.2.3 Radio tuning shares - English-language station formats
Figure 4.2.4 Radio tuning shares - French-language station formats
Figure 4.2.5 Revenues - Private commercial radio stations
Figure 4.2.6 Average annual revenues and PBIT per station – Private commercial radio stations
Figure 4.2.7 PBIT and PBIT margin - Private commercial radio stations
Figure 4.2.8 Revenues – English-language private commercial radio stations
Figure 4.2.10 PBIT and PBIT margin – English-language private commercial radio stations
Figure 4.2.11 Revenues – French-language private commercial radio stations
Figure 4.2.13 PBIT and PBIT margin – French-language private commercial radio stations
Figure 4.2.14 Revenues – Ethnic private commercial radio stations
Figure 4.2.16 PBIT and PBIT margin – Ethnic private commercial radio stations
Figure 4.3.2 Source of revenues for private conventional television (2010)
Figure 4.3.9 Revenues of ethnic and third-language specialty and digital Category 2 pay services
Figure 4.3.11 Revenues of large English-language private conventional television ownership groups
Figure 4.3.12 Revenues of large French-language private conventional television ownership groups
Figure 4.3.13 Advertising revenues: CBC conventional television stations (owned & operated)
Figure 4.4.1 Percent of revenues and subscribers by type of distribution platform in 2010
Figure 4.4.2 EBITDA margins achieved from basic and non-basic programming services
Figure 4.5.1 Cycle of consumer adoption/Product Life Cycle
Figure 4.5.2 Internet applications – bandwidth requirements
Figure 4.5.3 Popular Internet activities for Canadian Internet users
Figure 4.5.4 Video technology penetration in Canada
Figure 4.5.5 Canadian Internet video viewing, by language
Figure 4.5.6 Canadian Internet video viewing, by type
Figure 4.5.7 Penetration of Internet TV viewers, by selected demographic groups
Figure 4.5.8 Audio technology (excluding conventional radio) penetration in Canada
Figure 4.5.9 Podcast usage in Canada
Figure 4.5.10 Downloading music in Canada
Figure 4.5.11 Streaming radio in Canada
Figure 4.5.12 AM/FM broadcasters as a source of audio material in streaming audio
Figure 4.5.13 Percent of Internet TV viewers of full-length TV programs
Figure 4.5.14 Average weekly hours Canadians spend listening to streamed audio and radio podcasts
Figure 4.5.15 Canadian online advertising revenues
Figure 4.5.16 Canadian mobile advertising revenues
Figure 5.1.1 Telecommunications revenues and percent annual growth
Figure 5.1.2 Annual revenue growth, by market sector
Figure 5.1.3 Distribution of telecommunications revenues, by market sector
Figure 5.1.4 Total telecommunications revenue market share, by type of service provider (2010)
Figure 5.1.5 Total telecommunications revenue market share, by type of service
Figure 5.1.8 Telecommunications revenues and EBITDA margins
Figure 5.1.9 Capex as a percentage of revenues, by type of TSP (includes AWS expenditures in 2010)
Figure 5.1.10 Wireline inter carrier expenses as a percentage of revenues, by type of TSP
Figure 5.2.2 Alternative TSP local residential and business lines, by type of facility
Figure 5.2.3 Large incumbent TSP pay telephone quantities and revenue per payphone
Figure 5.2.4 Share of circuit-switched v. VoIP retail local lines
Figure 5.3.1 Internet access revenue share, by type of entity
Figure 5.3.2 Business Internet access revenues, by access technology
Figure 5.3.3 Residential Internet access technology mix (2006 v. 2010)
Figure 5.3.4 Broadband (greater than 1.5 Mbps) subscriptions
Figure 5.3.5 Residential Internet Protocol provisioned service revenues
Figure 5.3.6 Broadband availability (percent of households, 2010)
Figure 5.3.7 Broadband availability, by speed (2010 v. 2009, percentage of households)
Figure 5.3.8 Broadband availability – Urban v. rural (percentage of households)
Figure 5.3.9 Broadband availability v. broadband subscriptions
Figure 5.4.1 Data and private line revenue market share, by type of TSP
Figure 5.4.2 Data revenue market share, by type of TSP
Figure 5.4.3 Private line revenue market share, by type of TSP
Figure 5.5.1 Wireless revenues, subscribers, and revenues per subscriber (excluding paging)
Figure 5.5.2 Wireless revenue and subscriber growth rates (excluding paging)
Figure 5.5.3 Revenues by major component (excluding basic voice)
Figure 5.5.4 Percent of prepaid and post paid subscribers
Figure 5.5.6 Retail and Wholesale Revenue Split
Figure 5.5.7 Wireless TSPs' subscriber market share
Figure 5.5.8 Wireless TSPs' revenue market share
Figure 5.5.9 Population coverage and penetration
Figure 5.5.11 Total number of MMS and SMS messages
Figure 5.5.12 Established carriers’ coverage v. new entrants’ coverage
Figure 6.1.1 Telecommunications revenues, by market sector, 2010
Figure 6.1.2 Global telecommunications retail revenues, by region, 2010
Figure 6.1.3 Global telecommunications retail revenues, by market sector, 2006–2010
Figure 6.1.4 Average monthly telecommunications retail revenues, 2010
Figure 6.1.5 International penetration, 2010
Figure 6.1.6 Share of fixed broadband subscriptions, by technology, 2010
Figure 6.1.7 Average measured fixed broadband speeds, 2009 and 2010
Figure 6.1.8 Average measured mobile broadband speeds, 2009 and 2010
Figure 6.1.9 Wireless ARPU – monthly revenues, including data share, 2010
Figure 6.1.10 Proportion of post-paid versus prepaid mobile subscriptions, 2006 and 2010
Figure 6.1.11 Proportion of pay TV versus free-to-air households, 2008 and 2009
Figure 6.1.12 Digital TV penetration and growth, 2007–2009
Figure 6.1.13 Global IPTV subscribers, by region, 2010
Figure 6.1.14 Global television households, by platform, 2005–2010
List of maps
Map 5.5.1 Presence of wireless facilities-based service providers
Map 5.5.2 Presence of HSPA+ wireless facilities-based service providers
Notes:
[1]The markets consist of 5 broadcasting markets ( radio, television, BDU speciality, and VOD, pay & PPV) and 6 telecommunications markets (local & access, long distance, Internet, data, private line and wireless)
[2]Revenues per subscriber per month were derived by dividing total revenues by the number of subscribers and by the number of months in the year.
