Canadian Telecom Companies Can Expect Slow but Ongoing Growth

Press Release - May 11, 2007

Canada’s telecommunications industry is set for another year of record profits in 2007, but growth will remain slow and measured, according to the Conference Board’s Canadian Industrial Outlook - Sprint 2007 report.

“Despite modest sales growth and minimal price increases, industry profits reached a record high in 2006, thanks to weak growth in material and capital costs,” said economic analyst, Michael Burt. “However, weak price appreciation and a shrinking market for traditional wired services will limit industry profit growth to an average of just 4.4 per cent annually between 2007 and 2011.”

An explosion in the popularity of mobile phones and VoIP telephony has put the traditional landline market on a slow but steady slide. And as big cable companies get a firm foothold in the VoIP market and regulatory constraints loosen, the stage is set for cutthroat competition.

In short, the overall telecom market will increase in size but a significant increase in competition will prevent price gouging on the part of service providers.