Demonstrating the intense fluctuations coming to Canada's wireless industry in 2010, new research suggests the next six months will see 55 per cent of Canadians buying a new handset, likely a smart phone.
The shift has serious implications for both the way Canadians interact and for the $16-billion sector, which is adjusting to consumer preference, a shift away from land-line phones to wireless, and a new surge in competition.
TNS Canadian Facts, which released its Global Telecoms Insights study today, said increased consumer confidence has led to a dramatic turnaround: This time last year, only 19 per cent of Canadians planned a similar purchase. "People are getting a little more optimistic just as a lot of new and interesting product is coming out on the market," said Rajaie Matuk, research director at TNS. "I think you will see a big boom."
Of those who said they would buy a handset, 28 per cent wanted a touch-screen smart phone and 19 per cent wanted a Qwerty-keyboard, likely for easy texting, the study showed. Both of these growing habits - texting and data use - have gradually eroded the time spent talking on phones, analysts said, in part to the detriment of large wireless carriers.
Canadians are increasingly using smart phones and laptop data sticks to connect to the Web, according to data collected by Toronto's Convergence Consulting Inc., which estimates 30 per cent of wireless subscribers will be using such devices by the end of 2010 and around 50 per cent by the start of 2014.
Greg MacDonald, an analyst with National Bank Financial, said the shift from providing voice services to data can be beneficial for carriers, in that it draws customers who tend to spend more overall. "But the negative of that," he added, is the capital expenditure "involved in building out the network as you get greater loads."
Another seismic shift in 2010 will be the wireless market's deluge of new entrants, such as Wind Mobile, which launched in December.
As other upstarts, such as Public Mobile, try to undercut incumbents, more Canadians will view their land-line telephones as dated and make the switch to wireless for the first time, said Amit Kaminer of Seaboard Group, a telecom consultancy. Some new entrants do not offer traditional land-line phone services and will not worry about "cannibalizing" from existing paid subscribers by offering extremely cheap rates, Mr. Kaminer said.
"Wireless substitution is going to be one of the hot topics of 2010," he added. "As Canadians, we're just waiting for the right price."
