CRTC Communications Monitoring Report

2012

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3.0 The Communications service industry

This pie chart shows the broadcasting and telecommunications revenues as a percentage of total Industry revenues in 2011. Broadcasting: 28%; Telecommunications: 72%; Industry revenues: $59.3 billion.

3.1 Overview

This section provides a broad overview of the broadcasting and telecommunications service industries (the Canadian communications service industry), and briefly examines the extent to which industry participants offer communications services outside of their traditional core services. In 2005, revenues of incumbent TSPs and cable companies, as a percent of total communications revenues, were approximately 59% and 23%, respectively. At the end of 2011, their revenues represented 50% and 32% of total communications revenues, respectively. The financial performance of individual sectors within broadcasting and telecommunications is found in sections 4 and 5.

Communications service industry at a glance ($ billions)
  2010 2011 % Growth
Communications revenues 57.4 59.3 3.3
Broadcasting 15.7 16.6 5.5
Radio 1.6 1.6 3.9
TV 6.1 6.4 5.4
BDU 8.1 8.6 5.8
Telecommunications 41.7 42.7  
Communications revenues by type of provider
Incumbent TSPs 29.1 29.7 2.3
Cable companies 18.5 19.2 3.9
Other 9.9 # 10.4 5.2
Communications revenues to GDP (%) 4.7 4.6  

Source: CRTC data collection

Statistical information – Financial overview

Table 3.1.1 Communications revenues ($ billions)
  2007 2008 2009 2010 2011 CAGR
2007-2011
Telecommunications
Wireline 23.6 24.2 24.0 23.7 23.6 -0.1%
Annual growth 1.2% 2.2% -0.5% -1.6% -0.3%  
Wireless 14.5 16.0 16.9 18.0 19.1 7.1%
Annual growth 14.4% 10.4% 5.3% 6.6% 6.2%  
Subtotal 38.2 40.2 40.9 41.7 42.7 2.9%
Annual growth 5.8% 5.3% 1.8% 1.8% 2.5%  
Broadcasting
Radio AM/FM 1.5 1.6 1.5 1.6 1.6 1.8%
Annual growth 6.2% 6.1% -5.4% 2.9% 3.9%  
Television 5.3 5.5 5.5 6.1 6.4 5.0%
Annual growth 4.4% 4.3% -0.1% 10.6% 5.4%  
BDU 6.3 6.9 7.4 8.1 8.6 8.0%
Annual growth 8.8% 9.7% 7.5% 9.3% 5.8%  
Subtotal 13.1 14.0 14.4 15.7 16.6 6.2%
Annual growth 6.7% 7.1% 3.0% 9.1% 5.5%  
Total revenues 51.2 54.2 55.3 57.4 59.3 3.7%
Annual growth 6.0% 5.8% 2.1% 3.7% 3.3%  

Source: CRTC data collection

Figure 3.1.1 Broadcasting and telecommunications annual revenue growth rates

This line chart shows the broadcasting and telecommunications annual revenue growth rate for each year between 2007 and 2011. Telecommunications: 5.7%, 5.3%, 1.8%, 1.8% and 2.5%; Broadcasting 6.7%, 7.1%, 3.0%, 9.1% and 5.5%.

Source: CRTC data collection

Table 3.1.2 Industry revenues by type of provider ($ thousands)
  2009 2010 2011 CAGR
2009-2011
Incumbent TSPs
Telecommunications 27,179.7 27,169.8 27,605.1 0.8%
Annual growth 0.1% 0.0% 1.6%  
BDUs 1,662.4 1,899.1 2,137.6 13.4%
Annual growth 10.1% 14.2% 12.6%  
Subtotal 28,842.1 29,068.9 29,742.7 1.5%
Annual growth 0.6% 0.8% 2.3%  
Utility telcos and other TSPs 723.7 713.5 849.8 8.4%
Annual growth 23.5% -1.4% 19.1%  
Resellers 1,594.7 1,533.8 1,522.8 -2.3%
Annual growth -14.4% -3.8% -0.7%  
Cable Companies
Telecommunications 11,428.4 12,237.0 12,734.9 5.6%
Annual growth 7.8% 7.1% 4.1%  
BDUs 5,767.2 # 6,219.9 # 6,450.7 5.8%
Annual growth 6.7% 7.8% 3.7%  
Subtotal 17,195.6 18,456.9 19,185.6 5.6%
Annual growth 7.5% 7.3% 3.9%  
Broadcasting - Other entities 6,983.2 7,608.4 7,998.1 7.0%
Annual growth -1.2% 9.0% 5.1%  
Total 55,339.2 57,381.5 59,299.0 3.5%
Annual growth 2.1% 3.7% 3.3%  

Source: CRTC data collection

Table 3.1.3 Industry convergence: Cable v. Telecommunications
Year Percent of incumbent BDUs’ revenues from telecom services1 Percent of ILECs’ revenues from BDU services
2011 66.3% 7.2%
2010 66.2% 6.5%
2009 66.4% 5.8%
2008 66.1% 5.3%
2007 64.7% 4.7%

1. Telecom services include: Local & access, long distance, Internet, data & private line, and wireless.

Source: CRTC data collection

Table 3.1.4 Percent of broadcasting and telecommunications revenues generated by companies operating in multiple markets
Number of markets Number of reporting companies operating in these markets Percent of broadcasting and telecommunications revenues generated in these markets
  2010 2011 2010 2011
11 3 3 63 62
10 0 0 0 0
9 1 1 4 5
8 3 4 21 23
7 2 1 3 1
6 4 6 0 0
5 12 11 0 0
4 24 22 3 3
3 27 35 1 1
2 42 44 2 2
1 218 217 2 2

Source: CRTC data collection

Figure 3.1.2 Broadcasting and telecommunications revenues for the top 5 group of companies, the next top 5 group and the remaining companies

This pie chart shows broadcasting and telecommunications revenues for the top 5 group of companies, the next top 5 group and the remaining companies for 2010 and 2011. Top 5 companies: 83% 83%; next 5 companies: 9%, 10%; remaining companies: 8%, 8%.

Source: CRTC data collection

Figure 3.1.3 Broadcasting and telecommunications revenues by type of provider (2011)

This pie chart shows the total broadcasting and telecommunications revenue market share by type of provider in 2011. Data is taken from table 3.1.2 above. There are five types of providers in this pie chart. Incumbent TSPs: 50%; Broadcasting and other entities: 14%; Cable companies: 32%; Resellers: 3%; Other facilities-based TSPs: 1%.

Source: CRTC data collection

Figure 3.1.4 Commercial broadcasting and telecommunications revenues (Excluding non-programming and exempt services)

This clustered column chart shows the telecommunications, broadcasting, and combined broadcasting and telecommunications revenues in billions of dollars for each year between 2007 and 2011. Telecommunications: 38.2, 40.2, 40.9, 41.7 and 42.7; Broadcasting: 13.1, 14.0, 14.4, 15.7 and 16.6; Combined broadcasting and telecommunications: 51.2, 54.2, 55.3, 57.4 and 59.3.

Source: CRTC data collection

Figure 3.1.5 BDU revenues by service type

This combination of a clustered column and plotted dot chart shows BDU revenues in millions of dollars by type of service for each year between 2007 and 2011. Revenues from basic and non basic programming services: 6,308, 6,922, 7,449, 8,149 and 8,449; Revenues from exempted programming and non programming services: 2,768, 3,483, 4,102, 4,522 and 5,025; Total BDU revenues from all services: 9,076, 10,404, 11,551, 12,672 and 13,474.

Source: CRTC data collection

Figure 3.1.6 BDU – EBITDA margins achieved from all services (programming, exempted and non-programming services)

This line chart shows the EBITDA margins achieved by Cable, DTH and MDS, and Cable, DTH and MDS combined for each year between 2007 and 2011.  These margins reflect operating results from all services (programming, exempted programming and non programming services. Cable: 40.2%, 44.5%, 45.1%, 45.4% and 44.2%; DTH and MDS: 16.9%, 18.9%, 20.6%, 24.1% and 23.5%; Cable, DTH and MDS combined: 35.4%, 39.4%, 40.4%, 41.3% and 40.3%.

Source: CRTC data collection

Figure 3.1.7 Price indices [TPI1, BDU2 (cable and satellite, including pay television), Internet access services, and CPI]

This line chart shows the following price indices from 2002 to 2011 Consumer price index (CPI): 100, 102.8, 104.7, 107, 109.1, 111.5, 114.1, 114.4, 116.5 and 119.9; Telephone price index (TPI): 100, 100.2, 100.6, 101, 100.9, 101.6, 105.9, 106.5, 111.2 and 112.3; Cablevision and satellite services (including pay television) index: 100, 104.8, 108.8, 112.5, 116.8. 122.7, 128.7, 135.8, 143.4 and 151.4; Internet access services index: 100, 99.1, 99, 97.1, 96.7, 97.5, 95.8, 94.8, 95.8 and 100.9.

  1. The TPI reflects the price changes experienced by a household for a basket of telephone services. The basket of telephone services reflects a weighted-average of consumer expenditures on basic local service, other local services (such as options and features), and long distance, installation, and repair services. However, the TPI does not include wireless or Internet service expenditures.
  2. The BDU price index reflects the price changes experienced by a household for a basket of cable television services. The basket includes both ‘Basic’ and ‘Extended’ cable services. Basic cable service is the minimum service to which all customers must subscribe. Extended cable service is the most popular package of additional channels. The index does not account for ‘bundling discounts.’

Source: Statistics Canada

Table 3.1.5 Monthly household communications expenditures by quintile (2011)
Service
($/month/household)
Lowest quintile Second quintile Third quintile Fourth quintile Highest quintile All classes
Landline telephone 33.91 33.51 37.01 42.56 42.39 37.66
Cell phone 31.58 43.33 58.25 73.00 98.50 60.92
Internet 18.45 25.47 31.80 34.65 39.28 29.95
Cablevision and DTH 37.99 45.76 52.09 59.35 67.11 52.42
Communications 121.75 148.03 179.26 209.60 247.34 180.95

Source: Statistics Canada - Survey of household spending, CRTC data collection

Figure 3.1.8 Household spending by quintile for the 7 highest expenditures

This line chart show how much Canadians are spending on shelter, transportation, food, clothing, recreation, healthcare and communications as a percentage of their incomes from the lowest to highest quintile income classes. Shelter: 34.0, 29.6, 29.1, 27.3, 26.3; Transportation: 16.4, 19.9, 21.0, 21.8, 21.6; Food: 15.2, 15.5, 13.9, 14.2, 13.0; Clothing: 5.3, 6.1, 6.1, 6.7, 7.1; Recreation: 3.5, 3.8, 5.4, 5.8, 6.7; Healthcare: 5.4, 5.1, 4.4, 4.0, 3.4; Communications: 5.4, 4.8, 4.3, 4.0, 3.4.

Source:  Statistics Canada - Survey of household spending, CRTC data collection

Figure 3.1.9 Canadian broadcasting and telecommunications revenue composition for a select number of large companies

The bubble chart illustrates the makeup and relative revenue magnitude of eight selected companies. Each company is displayed by a bubble which represents the magnitude of the respective company’s Canadian telecommunications and broadcasting revenues. The position of the bubble determines the extent of each company’s telephony versus broadcasting revenues; the closer the bubble is to the x-axis indicates that the company generates revenues mainly through broadcasting activities and vice versa for telecommunications revenues in 2011.

Source: CRTC data collection

Figure 3.1.10 Broadcasting and telecommunications operating platforms

This flow chart illustrates the various types of players in Canadian communications industry and how they deliver their service offerings to consumers explained in subsection 3.1: A Converging Industry.

Figure 3.1.11 Regulatory considerations in a converging industry

This chart describes the various regulatory issues that arise in a converging communications industry. The chart presents three main categories of convergence: corporate, technology, and customers. In each of these three categories, there are several regulatory issues, among others, that the communications industry as a whole needs to address. Under corporate convergence, there are issues such as diversity of voices, Canadian content production and market structure. Within technology, there are issues such as broadcasting act and new media, net neutrality, broadband deployment, basic service obligation, and spectrum management. And regarding customers, this category is expanded to look at issues which relate to the wholesale and retail customer segment. Some of these customer issues include essential services, quality of service, open access for devices, unwanted calling and spam, privacy, affordability, accessibility and others.
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