New providers in Canada's wireless phone market captured 25 per cent of those who subscribed to cellphone service in 2010, according to a report released by Canada's telecommunications regulator Thursday.
The CRTC detailed its findings on this and other elements of the communications sector in its annual Communications Monitoring Report.
The companies that only started offering wireless phone service in the past few years — Globalive, Mobilicity, Public Mobile and Videotron — made less of a dent in the overall market, though.
Those companies captured just two per cent of the overall subscriber share by the end of 2010, the report showed, meaning that Bell , Rogers and Telus continue to dominate the cellphone industry.
“I think the incumbents have actually done a good job of holding off the new entrants but I think the new entrants are just getting started,” said Iain Grant, managing director for market research and technology firm SeaBoard Group.
“Every week that goes by the new entrants are adding new towers and new coverage.”
The increase in the number of choices on the wireless market has been great for consumers, Grant said.
The “competitive presence” of the new companies contributed to a reduction in the average monthly cellphone bill from $58.81 to $57.86, the CRTC said in a release.
“Even though only two per cent are signed up as customers of new entrants, a much greater percentage of the population ... has already experienced real choice in wireless and the benefits of that because the big guys have reacted aggressively,” said Anthony Lacavera, chairman and CEO of Globalive.
Mobilicity CEO Dave Dobbin said it's clear that the new competition in the wireless market is having a positive effect for Canadians.
“What's important now is that the government ensures that these new competitors continue to survive and to thrive,” Dobbin said.
He said the government needs to make sure that the new players get a share of the 700 megahertz spectrum that will be available to wireless companies in the next few years.
“Getting that 700 megahertz spectrum will allow us to do things like build out to rural areas,” Dobbin said.
“If the big three are allowed to buy that spectrum, new competition will never come to the smaller cities in Canada,” Dobbin said.
Telus spokesman Jim Johannsson said with the three national cell providers and six regional carriers, Canada is one of the most competitive wireless markets.
“We've got the sixth most competitive wireless market structure in the OECD (Organization for Economic Co-operation and Development),” Johannsson said.
“Canada's average per minute wireless costs are the 11th lowest in the OECD, two cents per minute below the OECD average,” he said.
And Johannsson noted that Canadian wireless companies are keeping rates that low with just 12 wireless subscribers per square kilometre, while that number rises to 37 in the U.S. and 312 in the United Kingdom.
Calls to Rogers and Bell were not immediately returned.
The federal government has made it a priority in the past few years to increase the number of cellphone providers competing in Canada in the hopes of encouraging choice for consumers.
In 2009, the Conservatives overruled a decision by the CRTC, which had previously ruled Globalive did not meet requirements that telecommunication companies be Canadian controlled, to allow the company to operate.
A Federal Court ruled in February the government illegally intervened to overrule the CRTC regarding its decision to block Globalive from operating.
But Ottawa appealed and a Federal Court of Appeal sided with the government in June.
This past year hasn't exactly been a “field of roses” for the new entrants, Grant said.
Globalive's court battles involving the federal government and the CRTC, for example, created issues for the company's ability to focus on expanding the number of customers it has.
This created ongoing issues for the company in 2010, said Lacavera, particularly in trying to rent spaces for their stores from landlords who were uncertain about their future.
The company will continue to expand their cellphone network in 2011, he said, including to places like southern Ontario, British Columbia and Alberta.
Grant predicted “much more robust numbers” for the new entrants as a result of the continued expansion for Globalive and other companies in 2011.
The market for wireless cellphone users continued to grow in 2010, the report showed.
The number of people who subscribed to cellphone services increased by 8.5 per cent to 25.8 while the number of people who had home phone services went down by almost one per cent to 12.6 million.Report Typo/Error
Follow us on Twitter: