Canadians’ growing love affair with mobile devices is putting the country on track to achieving a wireless penetration rate that exceeds 100 per cent in about three years.
More than three-quarters of Canadians owned a wireless device at the end of 2011 but that number is expected to climb as it becomes increasingly common for consumers to own more than one mobile gadget. And the explosive popularity of data-hungry devices such as smartphones and tablet computers is creating growth opportunities for wireless carriers, some of which are already seeing their data traffic increase by 5 per cent per week.
“Today, more than 26 million Canadians have a mobile phone or wireless device – a number that continues to experience significant growth every year,” said Bernard Lord, chief executive officer of the Canadian Wireless Telecommunications Association, in an address to the 2012 Canadian Telecom Summit in Toronto on Monday.
“And we expect to see over 100-per-cent [wireless] penetration in just the next few years.”
Such market-saturation levels are already a reality in some European countries, where it is common for consumers to own multiple cellphones or SIM cards, mostly to avoid roaming charges while travelling across the continent. Canadians, however, are recognized for being global leaders in smartphone and tablet adoption – and their voracious appetite for mobile data, especially video, is rapidly changing the economics of the wireless industry.
A maturing wireless market means carriers expect their subscription-based business models to flatten over the coming years. As a result, carriers are racing to find new ways to monetize their networks by offering innovative services to drive wireless data growth.
It is estimated that an average smartphone uses 35 times the bandwidth of a regular cellphone, while a tablet uses up to 121 times the bandwidth, Mr. Lord said. He noted that increasingly, wireless data is being consumed inside the home.
“We think there is no shortage of growth on the horizon,” Rob Bruce, president of communications at Rogers Communications Inc., said in an interview.
Rogers, Canada’s largest wireless carrier with more than 9 million wireless subscribers, is already rolling out new consumer services such as mobile video, mobile commerce and remote home monitoring that leverage its existing wireless network.
But the company has experienced a sequential slowdown in its wireless data revenue growth rate in its most recent two quarters as more consumers opted for cheaper data plans. Mr. Bruce said he is not worried: “There is always some ebb and flow from quarter to quarter. In the long run we think there is lots of growth in our business.”
He noted that globally, the wireless industry has already passed one zettabyte of mobile data, adding that number is expected to double every two years. As a point of reference, he mused that only a few years ago, the entire Internet was believed to be half of a zettabyte. As part of the coming mobile broadband revolution, it is forecasted there will be some 50 billion connected devices around the world by 2020, said Mark Henderson, president and CEO of Ericsson Canada.
“Almost 40 per cent of smartphone users globally use the Internet before they get out of bed,” he told delegates. “They reach over and shut off the [device’s] alarm and then pick it up. And then they start looking at the tweets, the Facebook, what the weather is … then they go to the bathroom.”
He added: “The only point in the day when usage dips significantly on a global scale is dinner.”