Communications Monitoring Report 2014: The Communications services industry

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3.0 The Communications services industry

This pie chart shows the broadcasting and telecommunications revenues as a percentage of total Industry revenues in 2013. Broadcasting: 28%; Telecommunications: 72%; Industry revenues: $61.9 billion.

This section provides an overview of the broadcasting and telecommunications services industries (the Canadian communications service industry).

It presents the financial performance of Canadian communications entities and a number of financial indicators, such as revenues over a five-year period. Some of the characteristics of the industry, such as ownership and the extent to which industry participants offer communications services outside their traditional core services, are examined. In 2006, the revenues of incumbent TSPs and cable companies, as a percentage of total communications revenues, were approximately 59% and 23%, respectively. At the end of 2013, their respective revenues represented 50% and 32% of total communications revenues. The financial performance of the individual broadcasting and telecommunications sectors is found presented in sections 4 and 5.

Table 3.0.0
Communications service industry at a glance
Revenues ($ billions) 2012 2013 Growth
Communications 60.8 61.9 1.9%
Broadcasting 16.9 17.1 1.3%
Radio 1.6 1.6 0.2%
TV 6.5 6.5 -0.2%
BDU 8.8 9.0 2.7%
Telecommunications 43.9 44.8 2.0%
Communications revenues by type of provider
Incumbent TSPs 30.3 31.0 2.2%
Cable companies 19.6 20.1 2.4%
Other 10.9# 10.9 nil

Source: CRTC data collection

This table presents a snapshot of the state of Canada’s communications service industry. It provides total industry revenues, as well as revenues for broadcasting and telecommunications individually and the respective components of each for 2012 and 2013. A healthy communications service industry contributes to the fulfillment of the objectives of the Telecommunications Act and the Broadcasting Act. The # symbol denotes a change in the data from what was published in the previous Communications Monitoring Report (refer to Appendix 1 for details).

a) Revenues

Table 3.0.1
Communications revenues ($ billions)
2009 2010 2011 2012 2013 CAGR
2009-2013
Telecommunications
Wireline 24.0 23.6 23.6 23.6 23.7 -0.4%
Percentage growth -0.6 -1.7 0.0 -0.3 0.4  
Wireless 16.9 18.0 19.1 20.4 21.2 5.8%
Percentage growth 5.3 6.6 6.2 6.5 3.8  
Subtotal 40.9 41.6 42.8 43.9 44.8 2.3%
Percentage growth 2.2 1.7 2.7 2.8 2.0  
Broadcasting 
Radio AM/FM 1.5 1.6 1.6 1.6 1.6 0.4%
Percentage growth -5.4% 2.9% 3.9% 0.4% 0.2%  
Television 5.5# 6.1# 6.4# 6.5 6.5 4.4%
Percentage growth 0.1% 10.6% 5.4% 1.9% -0.2%  
BDU 7.4# 8.1# 8.6# 8.8# 9.0 5.9%
Percentage growth 7.6% 9.3% 5.6% 2.0% 2.7%  
Subtotal 14.4 15.7 16.6 16.9 17.1 4.7%
 Percentage growth 3.2% 9.1% 5.3% 1.8% 1.3%  
Total revenues 55.3 57.4 59.3 60.8 61.9 2.8%
Percentage growth 2.1% 3.7% 3.4% 2.5% 1.9%

Source: CRTC data collection

Industry revenues are one of the principal to measure the performance of the communications industry. This table shows revenue growth from 2009 to 2013 for telecommunications service providers (TSPs) and broadcasters [including broadcasting distribution undertakings (BDUs)] as well as the compound annual growth rate (CAGR). The # symbol denotes a change in the data from what was published in the previous Communications Monitoring Report (refer to Appendix 1 for details).

Figure 3.0.1 Broadcasting and telecommunications annual revenue growth rates (2009-2013)

This line chart shows the broadcasting and telecommunications annual revenue growth rate for each year between 2009 and 2013. Telecommunications: 2.2%, 1.7%, 2.7%, 2.8% and 2.0%; Broadcasting 3.2%, 9.1%, 5.3%, 1.8% and 1.3%.

Source: CRTC data collection

Annual revenue growth rates are an indicator of overall broad trends in the communications industry. This graph shows annual revenue growth rates for the telecommunications and broadcasting industries from 2009 to 2013.

Table 3.0.2
Industry revenues by type of provider ($ thousands)
2010 2011 2012 2013 CAGR
2010-2013
Incumbent TSPs 
Telecommunications 27.2 27.7 28.0 28.3 1.3%
Percentage growth -0.1 1.8 1.0 1.1  
BDUs 1.9 2.1 2.4 2.7 12.6%
Percentage growth 14.2 12.6 10.3 15.1  
Subtotal 29.1 29.8 30.3 31.0 2.1%
Percentage growth 0.7 2.5 1.7 2.2  
Other facilities-based service providers 0.7 0.9 1.2 1.2 19.6%
Percentage growth -1.3 21.0 34.0 5.6  
Resellers 1.5 1.5 1.5 1.5 0.8%
Percentage growth -3.5 -0.8 2.3 0.9  
Cable-based carriers 
Telecommunications 12.2 12.7 13.3 13.8 4.1%
Percentage growth 7.1 4.0 4.2 4.0  
BDUs 6.2 6.5 6.3 6.3 0.2%
Percentage growth 7.9 3.7 -1.9 -1.0  
Subtotal 18.5 19.2 19.6 20.1 2.8%
Percentage growth 7.3 3.9 2.2 2.4  
Broadcasting - Other entities 7.6 8.0 8.2 8.1 2.2%
Percentage growth 8.9 4.9 2.6 -0.9  
Total 57.4 59.3 60.8 61.9 2.6%
Percentage growth 3.7 3.4 2.4 1.9  

Source: CRTC data collection

Canadians receive broadcasting and telecommunications services from a range of types of service providers, through a range of technologies. This table lists each type of telecommunications and broadcasting service provider and shows changes in total annual revenues for each year between 2010 and 2013.

b) Industry characteristics

Table 3.0.3
Industry convergence – Cable vs. telecommunications
Year Percentage of cable-based carriers revenues from telecommunications services Percentage of incumbent TSPs revenues from television services
2013 68.7 8.8
2012 67.7 7.8
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

Source: CRTC data collection

This table shows the extent to which cable-based carriers collect revenues from telecommunications services and incumbent TSPs (traditional telephone companies) collect revenues from television services. It demonstrates the state of convergence in the industry between 2007 and 2013. Telecommunications services include local telephone, long distance, Internet, data and private line, and wireless services.

Table 3.0.4
Percentage of broadcasting and telecommunications revenues generated by companies operating in multiple sectors
Number of sectors in which companies offer service Number of reporting companies operating in these sectors Percentage of broadcasting and telecommunications revenues generated in these sectors
2011 2012 2013 2011 2012 2013
11 3 3 3 62 61 63
10 0 0 0 0 0 0
9 1 1 1 5 5 5
8 4 5 6 23 24 25
7 1 1 0 1 1 0
6 6 3 2 0 0 0
5 11 14 12 0 0 0
4 22 24 17 3 3 2
3 35 39 31 1 2 1
2 44 36 28 2 2 1
1 217 233 186 2 3 2

Source: CRTC data collection

This table compares the number of different services offered by communications service providers with the percentage of revenues generated. The data show that the three communications service providers that offer services in all 11 sectors of the Canadian market (including radio, television, BDU, specialty, and video on demand, pay and pay-per-view in the broadcasting industry, and local and access, long distance, Internet, wireless, data, and private line in the telecommunications industry) generate more than 60 percent of total industry revenues. In contrast, more than 180 providers that offer only one service generate three percent of industry revenues.

Some changes in the 2012 figures are due to an increase in the number of reporting companies. Affiliates are included with their parent companies.

Figure 3.0.2 Percent of total combined revenues by broadcasting and telecommunications ownership groups, and remaining groups and entities

This bar chart shows broadcasting and telecommunications revenues for the top 5 group of companies, the next top 5 group and the remaining groups/entities for 2011, 2012 and 2013. Top 5 companies: 83%, 83% and 85%; next 5 companies: 10%, 10% and 9%; remaining companies: 8%, 8% and 6%.

Source: CRTC data collection

Canada’s communications services market is dominated by a small number of groups/entities. The top five groups, BCE, Quebecor, Rogers, TELUS, and Shaw, account for approximately 85% of total industry revenues. The next five largest groups/entities, Astral, Bragg, Cogeco Cable Inc., MTS Inc., Saskatchewan Telecommunications, and Telesat Canada, gather approximately 9%, and all remaining groups/entities about 6%. Groups’ revenues include those of their affiliates.

Figure 3.0.3 Broadcasting and telecommunications revenues by type of provider (2013)

Canadians may access broadcasting and telecommunications services from a variety of service providers. This pie chart shows the percentage of total industry revenues realized by each type of service provider in 2013.

This pie chart shows the total broadcasting and telecommunications revenue market share by type of provider in 2013. Data is taken from table 3.0.2. There are five types of providers in this pie chart. Incumbent TSPs: 50%; Broadcasting and other entities: 13%; Cable-based carriers: 32%; Resellers: 3% and Other facilities-based service providers: 2%.

Source: CRTC data collection

Figure 3.0.4 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 2009 and 2013. Telecommunications: 40.9, 41.6, 42.8, 43.9 and 44.8; Broadcasting: 14.4, 15.7, 16.6, 16.9 and 17.1; Combined broadcasting and telecommunications: 55.3, 57.4, 59.3, 60.8 and 61.9.

Source: CRTC data collection

This bar graph presents the breakdown of total communications industry revenues for both telecommunications and broadcasting services between 2009 and 2013.

Figure 3.0.5 Cable-based service provider revenues by service type

BDUs collect revenues from two principal sources: basic and non-basic programming services (i.e. revenues from the distribution of television services), and services that are either exempt from regulation or that are not programming related, such as revenues collected from non-BDU services, e.g. Internet and local telephone services). This bar graph shows total BDU revenues between 2009 and 2013, including revenues from both component sources.

This combination of a clustered column and plotted dot chart shows BDU revenues in billions of dollars by type of service for each year between 2009 and 2013. Revenues from basic and non basic programming services: 5.0, 5.4, 5.6, 5.5, and 5.4; Revenues from exempted programming and non programming services: 4.1, 4.5, 5.0, 5.5 and 6.0; Total BDU revenues from all services: 9.0, 9.9, 10.6, 11.0 and 11.4.

Source: CRTC data collection

Figure 3.0.6 Canadian broadcasting and telecommunications revenue composition for a select number of large companies

Many of Canada’s largest communications service companies offer telecommunications services as well as broadcasting services. This graph plots the total revenues of Canada’s eight largest communications companies by size (the larger the circle, the greater the company’s revenue) and by industry (proximity to an axis indicates a larger share of revenue derived from that industry service).

This bubble chart measures the Canadian broadcasting and telecommunications revenue composition for eight large company groups for 2013. Revenue size of each company group, relative to each other, is reflected by the size of the bubble. The revenue composition is represented by the placement of the bubble.  Company groups with revenues that are telecom centric are placed closer to the y-axis, while company groups that are broadcasting centric are placed closer to the x-axis. Largest to smallest: Bell Group, Rogers Group, Telus Group, Shaw Group, Quebecor Group, MTS Allstream Group, Cogeco Group, SaskTel. y-axis (telecom centric) to x-axis (broadcasting centric): Telus Group, MTS Allstream Group, Sasktel Group, Bell Group, Rogers Group, Quebecor Group, Cogeco Group, Shaw Group.

Source: CRTC data collection

c) Financial performance

Figure 3.0.7  EBITDA margins achieved by BDUs for all services (programming, exempt, and non-programming)

This line chart shows the EBITDA margins achieved by Cable and IPTV, DTH and MDS, and All BDUs combined for each year between 2009 and 2013.  These margins reflect operating results from all services (programming, exempted programming and non programming services. Cable and IPTV: 45.1%, 45.4%, 44.1%, 43.4 and 44.0%; DTH and MDS: 20.6%, 24.1%, 24.6%, 30.2% and 33.5%; All BDUs: 40.4%, 41.3%, 40.5%, 41.1% and 42.2%.

Source: CRTC data collection

This table shows earnings before interest, taxes, depreciation, and amortization (EBITDA) margins for BDUs, including EBITDA margins for cable and IPTV services, direct-to-home (DTH) services, and multipoint distribution services (MDS) for the period from 2009 to 2013. The EBITDA margin is a measure of profitability for communications service companies. Higher EBITDA margins are associated with greater profitability.

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