Canadian Telecommunication Industry: Voice and data networks

MKTG 6650S (Summer 2011)

Section S

Professor Jane-Michele Clark

Voice and Data Networks

June 14th

2011

Ajay Singh

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Contents

Executive Summary ........................................................................................................................ 3

Overview of Canadian Telecommunication Industry ..................................................................... 4

Operators ..................................................................................................................................... 5

Communication Equipment vendors ........................................................................................... 6

Trends impacting the Voice and Data network industry ................................................................ 6

Customer Habits .......................................................................................................................... 6

M-commerce ............................................................................................................................... 7

Near Field Communication (NFC) .............................................................................................. 7

Emergence of Tablets .................................................................................................................. 8

Health Monitoring ....................................................................................................................... 8

Growth Sectors................................................................................................................................ 9

Mobile Broadband Opportunity .................................................................................................. 9

LTE ........................................................................................................................................ 11

Femto Cells ............................................................................................................................ 12

Exponential Growth in Mobile Apps ........................................................................................ 12

Job Creation in Next 5 years ......................................................................................................... 13

Declining sectors in the industry................................................................................................... 14

Voice vs. Data ........................................................................................................................... 14

Decline of CDMA based network ............................................................................................. 15

Decline of 2G technologies ....................................................................................................... 16

Decline in Messaging services of SMS ..................................................................................... 16

Job Losses in next 5-10 years ....................................................................................................... 17

Conclusion .................................................................................................................................... 18

Appendix A ..................................................................................................................................... 0

Appendix 1 ...................................................................................................................................... 1

Appendix 2 ...................................................................................................................................... 2

Appendix 3 ...................................................................................................................................... 3

Appendix 4 ...................................................................................................................................... 4

Appendix 5 ...................................................................................................................................... 5

Appendix 6 ...................................................................................................................................... 5

Appendix 7 ...................................................................................................................................... 6

Appendix 8 ...................................................................................................................................... 6

Appendix 9 ...................................................................................................................................... 7

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Appendix 10 .................................................................................................................................... 7

Appendix 11 .................................................................................................................................... 8

Appendix 12 .................................................................................................................................... 8

Appendix 13 .................................................................................................................................... 9

Appendix 14 .................................................................................................................................... 9

Appendix 15 .................................................................................................................................. 10

Appendix 16 .................................................................................................................................. 10

References ..................................................................................................................................... 11

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Executive Summary

The Canadian telecommunication services markets had total revenue of $35.9 billion in 2009,

which amounts to 4.4% compound annual growth rate in the period 2005-09. It can be broadly

classified into wireline telecom market and the wireless market. Though, the wireline segment

contributed 58.8% of the total market value but it declined mildly in recent years whereas

wireless segment had displayed fairly strong growth with a CAGR of 11.3 % for the same period

2005-09. This research paper has focused only on the wireless segment of the telecommunication

industry.

There are lot of trends that has impacted the wireless industry mainly the change in consumer

behavior towards adoption of social networking as a part of their normal communication

activities, development of mobile technology related applications and smartphone innovation,

expansion of mobile commerce, location based services, video content and health monitoring.

These trends have created an opportunity in mobile broadband market which is expected to

increase 26-fold between 2010 and 2015 (Cisco estimates). It will also lead to the faster

deployment of next generation high speed wireless networks and spurt in the development of

mobile applications. This will see a job increase in the sector by almost 9.3% from the current

274500 direct, indirect and support jobs.

However, there are certain sectors which will see decline namely voice networks, legacy 2G

technologies, HSPA and LTE networks replacing CDMA and EVDO networks. But, the paper

concludes that the company should invest in the mobile broadband market to expand its services

and data capacity. It should collaborate with other players to establish the ecosystem and acts as

a cornerstone to capture the value from this MBB opportunity.

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Overview of Canadian Telecommunication Industry

The telecommunication services market can be broadly classified into wireline telecom market

and the wireless market. The fixed line telephony market mainly consists of voice telephony,

internet over DSL and other non-voice services like fax. The wireless market consists of mobile

phones, smart phones, tablets, pagers and any other wireless services.

As per Datamonitor estimates, the Canadian telecommunication services markets had a total

revenue of $35.9 billion in 2009, which amounts to 4.4% compound annual growth rate in the

period 2005-09. The growth has reduced in recent years with 2009 account for a growth of only

1.9% (Appendix 1). But, this may also be attributed to the economic downturn in the global

economy. The CAGRs in the other North American markets of US and Mexico in the same

period are 1.1% and 8.3% respectively. The size of Canadian market is only 13.9% of the US

market which had a value of $259 billion in 2009. The Canadian telecommunication market is

expected to grow at CAGR of 4.5% in the next 5 year period of 2009-2014 to reach an estimated

value of $44.8 billion (Appendix 2).

The wireline segment still contributes the majority share of the Canadian telecommunication

services market with total revenue of $21.2 billion which is equivalent to 58.8% of the total

market value. On the other hand, wireless

segment contributed revenue of $14.8 billion

amounting to 41.2% of the total market value. It

may point that the wireline segment may still be

the most lucrative segment but the matter of fact

is that wireline segment had declined mildly

whereas wireless segment had displayed fairly strong growth with a CAGR of 11.3 % for the

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same period 2005-09.But, the growth rate is expected to decline in the next 5 years to an

anticipated CAGR of 9.3%, which is still a healthy rate for developed economy.

The key players in this industry are service providers and communication equipment vendors.

The majority of service providers own and operate the infrastructure of communication

equipments. The wireless service providers also offer mobile handsets and smartphones at

subsidized prices by locking the customers into yearly contracts. There are also MVNO

companies (mobile virtual network operators) who lease access from other network operators

and only concentrate on sales and marketing. The communication equipment vendors can be

both on mobile equipment side or network infrastructure side.

Operators: The major players in the services market are BCE Inc., Telus Corporation and Rogers

Communications Inc. There are some new entrants specifically in the wireless segment like

Globalive, Quebecor and Sasktel. In the recent spectrum auction, Globalive (Wind Mobile) bid

the second highest overall to obtain a 10MHz footprint in Toronto (Appendix 3). BCE is the

largest Canadian communication company and operates across 3 segments as Bell wireline, Bell

wireless and Bell Alliant. The focus of Bell Alliant is in the Atlantic Provinces and rural Ontario

and Quebec. Telus operates in wireline, wireless and media services whereas Rogers has a

presence in wireless, media and cable business. So, the three big players have presence in most

of the facets of the telecommunication services but they have different proportion of revenue

from wireline and wireless services as shown below:

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Communication Equipment vendors: The major players on the network equipment side are

Cisco, Ericsson, Alcatel-Lucent, Nokia-Siemens and Huawei. Most of these big vendors have

R&D operations in Canada with Ericsson has R&D labs in Montreal, ALU in Ottawa and

Huawei in Markham. The equipment market is facing deceleration in the recent years due to

economic meltdown but it is expected to recover in 2011 due to the anticipated upgradation of

the network by the service operators. The user equipment (UE) manufacturers include RIM,

Apple, Nokia and Samsung among others. The UE vendors are competing on differentiation by

providing better services and user interface.

Trends impacting the Voice and Data network industry1

Customer Habits: Canadians are turning more to the internet than traditional consumer

electronics for their entertainment, news and communications needs. As a result, there is a trend

that Canadian households possess more broadband enabled computers whose penetration have

increased from just over 50% in 2005 to 75.4% in 2009. Another interesting trend is the fact that

growing number of Canadians are spending more time on social networks, with facebook being

the most popular. As per eMarketer report (2010), about 15.1 million Canadians have visited

social networking sites at least monthly and it is going to increase to 18.4 million Canadians by

2014. In fact the Canadians, under the age of 30, have adopted social networking as a part of

their normal communication activities. This shift in the consumer behavior is also due to the

mobile technology changes that have brought the ability to communicate using different apps

through their feature rich smart phones. The other demographics including baby boomers and

seniors are also spending more time on internet enabled devices for emails and finding

1 This research paper will now focus only on the wireless segment of the telecommunication industry

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information on weather conditions, travel, health and news (as per Statistics Canada report).

These changes are causing an instantaneous spurt in the data usage per subscriber.

M-commerce: As per the recent study from Statistics Canada, Mobile Commerce: New

Experiences and Emerging Consumer Issues, there is an indication of expansion in mobile

commerce due to smartphone innovations, lower-priced data plans and high throughput wireless

networks like HSPA+. It estimated that mobile commerce can exponentially take-off due to

network effect and development of ecosystem of users and suppliers. The various categories in

mobile commerce includes mobile banking and payments, mobile marketing, location based

services and mobile shopping. CIBC was the first major bank to offer m-commerce application

for Apple’s iPhone and BlackBerry platform. It was soon followed by other banks including

RBC, TD and Scotiabank. The application gives the capability to do bill payments, fund transfer

and manage account information. Mobile marketing is also gaining momentum as it allows the

brand to interact more personally with its consumers. Though, m-commerce market is still small

in Canada but it is expected to gain consumer acceptance and follow the same growth trend as in

US. As per the industry journal Internet Retailer, 5% of the top 500 internet retailers in US have

customized m-commerce sites for smartphones. This trend is also expected to manifest itself in

the Canadian market so that the consumers can take the advantage of flexibility and convenience

provided by m-commerce applications on smartphones.

Near Field Communication (NFC): The NFC chips in the smartphone will enable secure

transactions including mobile payment, banking and loyalty cards. NFC chips have been used by

Google Wallet in Android phones by Sprint. MasterCard is already working to deploy its

PayPass readers in thousands of stores across USA. The iPhone 5 is also rumored to have NFC

chips and so will be most of new BlackBerry’s, as per RIM CEO, Jim Balsille.

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Emergence of Tablets: The launch of iPad by Apple has created a new category of devices. It

was followed by launch of tablets from slew of vendors like Motorola’s Xoom, RIM’s PlayBook

and Samsung’s Galaxy tab. The dawn of this new paradigm in the internet enabled devices will

surely have an impact on the wireless networks.

Increasing Video Content: Video has become the No.1 source of data traffic. As per Cisco, there

are three waves of video which is being influenced by changing consumer behavior and social

networking phenomenon. The first wave is the consumption of video over the internet on the PCs

where website YouTube alone streams

around 6 petabytes of data every month. It is

an incredible increase comparing the entire

internet backbone traffic was just 25

petabytes in 2000. The second and third

wave is the consumption of the internet

video on TVs and mobile devices. Mobile

data, video in particular, can be extremely

bandwidth hungry where an iPhone can generate as much traffic as 30 basic feature phones.

Health Monitoring: There is a convergence of mobile communication with health care sector

where mobile devices will be used to transmit the health information to servers maintained by

individuals or health care providers for analysis. This information can then be used for remote

patient monitoring and electronic care record system for patients. In Canada, there is already an

increasing collaboration between wireless service providers like Telus and government funded

eHealth to bring services such as mobile personal health records and tools.

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Growth Sectors

The Canadian wireless telecommunication market has experienced a double digit growth in

recent years and expected to record CAGR of 9.3% for the five year period 2009-14 (Appendix

4). The wireless subscribers are also expected to increase from current 24.4 million to 30.4

million by 2014, an increase of 24.5% since 2010. The

Canadian penetration is still lagging by 27 points from

USA and thus expected to catch up in future. In that

sense, there is still considerable scope for growth in

Canadian wireless market.

Mobile Broadband Opportunity: Globally, mobile data traffic remains a small proportion of the

fixed line data traffic. But, it is in no way undermining the capability of the mobile broadband

which is expected to explode under the influence of plethora of bandwidth hungry internet

capable mobile devices like smartphones, tablets and netbooks which can run a wide range of

data applications. As per Gartner estimates, the smartphones will exceed the number of PCs by

2013 and mobile devices will become dominant internet access device.

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Mobile Broadband will follow the same trend as mobile voice which has overtaken the fixed

telephone line for voice in 2001 (Appendix 5). The technological advancements in the areas of

nanotechnology, memory, processing power and battery power to weight

ratio have enabled the mobile devices to match user expectations in terms of

their home or office internet experience. The resulting innovation and

advancement has significantly increased the MBB2 subscriptions where it is

expected to reach almost 5 billion by 2016. The rapid adoption of MBB

already has a dramatic impact on the mobile networks (Appendix 6):

AT&T has seen more than 200% increase in total MBB usage in 209 itself

T-Mobile USA has reported that data-centric smartphone users consume 50 times more data

than voice centric users.

Verizon wireless reported more than doubling of data traffic every year

Vodafone, UK reported 10-fold increase in data traffic in 12 months

The unexpected increase in the data traffic has caused network congestion and requirement to

increase the network capacity to meet the ever increasing demand for data services. As per Cisco

estimated, the global mobile data traffic will exceed 1000 petabytes per month by 2012, a

thousand-fold increase in just 7 years.

New Wireless Networks for spectral efficiency: The

mobile broadband subscriptions have already overtaken

fixed line subscriptions in 2010 and are projected to

reach around 2B in 2013 (Appendix 7). It is the data

2 Mobile Broadband

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challenge for the operators who are experiencing 10-fold increase in data traffic but only 10%

increase in data revenue. The traffic for mobile voice has followed the revenue curve but it may

not guarantee the similar success for data services as revenue and traffic is more decoupled. So,

the challenge for operators is to increase the capacity in a financially viable manner. It provides

the opportunity for the deployment of new wireless technologies with increasing spectral

efficiency and higher peak data rates. There are various evolution paths for EDGE, HSPA, EV-

DO and WiMAX (Appendix 8) but technologies of interest would only be HSPA+ and LTE.

HSPA+: It refers to enhanced HSPA network which is already

being deployed by Bell, Telus and Rogers in Canada and T-Mobile

in US. It is being touted as network differentiator by the carriers

with peak downlink throughput of 28Mbps in Rel. 7 HSPA+. As

per Ericsson estimates, HSPA and LTE networks will contribute to

85% of subscription by 2016. In the 2009-2014 time periods, HSPA family networks will be the

mobile broadband leader with almost 1.7B subscriptions (Appendix 9).Operators in Canada will

continue to upgrade their existing CDMA and 3G networks in urban and sub-urban areas to

HSPA+ technology. The given technology will also provide an upgrade path to LTE and enables

voice over HSPA which can substantially free up spectrum for data (Appendix 10).

LTE: LTE networks are gaining ground as it is designed for significantly higher level of

capability and performance. This technology addresses the shift from voice to data by lowering

the cost of data delivery. Moreover, it is being used by the carriers as a means to differentiate

from other as this technology being truly 4th

generation. The big three Canadian operators are

looking for LTE deployment in some of the largest urban centers by late 2011 and early 2012.

The early LTE connectivity could only be for data modem cards as voice over LTE still remains

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nascent. There are already 20 commercial LTE networks in 14 countries including Verizon

Wireless in USA (Appendix 11) with 208 operators investing in LTE (GSA-May 11, 2011). But,

the real growth in the deployment of this technology may take another 2-3 years in Canada,

which is also in line with global LTE roadmap (Appendix 12).

Femto Cells: The lack of spectrum to address the data traffic requirements and coverage issues

can be addressed by femtocell architecture. It will not only provide indoor coverage but also help

to offload traffic onto the fixed networks through subscriber’s broadband connection. It is

increasingly being favored by operators to increase network capacity and user satisfaction as

users can be served at near peak data rates. Canadian operators are already looking at femtocell

solution for hotspot deployment and user’s broadband connection (Appendix 13).

Exponential Growth in Mobile Apps: The mobile data traffic usage is greatly influenced by App

Store concept introduced by Apple in July 2008 with the launch of iPhone. It was followed by

other mobile phone vendors like Android market from Google and App World from RIM

(Appendix 14). These app stores give the ability to 3rd

party developers to create application for

the particular mobile platforms and thus lead to the development of ecosystem. According to

AdMob, iPhone users spend over $9 per month on purchase of apps. The apps download are

increasing at a fanatic pace surpassing 10bn downloads with $5 bn revenue in 2010.

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Many Operators are joining this bandwagon of opening their own app stores so that they can

foster their own ecosystems which can optimally leverage the device and network capabilities.

Moreover, carriers don’t want to become a dumb transmission pipes for all these innovative

services and capture the upside of this new business. There is already an operator-led effort to

form Wholesale Application Community (WAC), a global cross platform app store for multiple

devices and operating systems. Rogers and Bell are part of this global initiative.

Job Creation in Next 5 years

As per OVUM consulting report, the Canadian wireless telecommunication industry created

274500 direct, support and indirect jobs (Appendix 15). So, jobs in the sector should increase at a

compound annual growth rate of 9.3% which is same as the growth rate of the Canadian wireless

telecommunication market. Wireless operators contribute to the lion’s share of the jobs in the

sector. The recent entry of new players like Wind Mobile in Toronto and Videotron in Quebec

will open new jobs in the wireless segment in next few years.

The smartphone market is in a high growth stage and expected to grow at a CAGR of 36% in the

period 2011-2015. So, it will create more jobs in Research In Motion and other related

companies. The growth in mobile broadband and M2M cloud platforms will also lead the growth

in jobs for Sierra wireless and other mobile computing companies.

The wireless infrastructure vendor providers will benefit from the deployment of HSPA+ and

LTE networks by Bell, Telus, Rogers and other regional providers. Ericsson’s Montreal R&D

centre, company’s largest outside of Sweden, can be beneficiary of this trend. Ericsson supplies

network equipments to Rogers and AT&T. Nokia Siemens Network and Huawei can lead to new

job creations due to their contract to supply HSPA+ network to Bell and Telus.

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Some other prospective job categories in this domain will be:

High speed backhaul to support growth in data traffic will require extensive investment in

optical fibers at both metro and regional level

Modernization of core network to an all-IP core. Some of the old operators like Bell have to

completely change their interfaces across the core network.

RF planning for the extensive deployment of the new HSPA and LTE networks

Mobile App developers

Declining sectors in the industry

Voice vs. Data: Mobile data traffic has over taken mobile voice traffic around 2011 in North

America. Voice has been the driving force for the design and deployment of the mobile networks

starting from 2G but the future networks of HSPA+ and LTE are designed around data traffic.

LTE has no dedicated CS call and voice will be carried in packets as data traffic. Voice has been

the mainstay of revenue for mobile networks in recent years but it is expected to decline in next 5

years and will be compensated by increased demand in mobile broadband both globally as well

as Canadian market as below:

The declining trend of the voice revenue is already visible in the Q1 results of BCE Inc.

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Decline of CDMA based network: CDMA technology has 10.3% of the global technology share

with North America constituting the 29.4% of the CDMA subscribers worldwide3. Bell, Telus,

Sasktel and MTS Mobility have deployed CDMA networks in Canada. But, the cellular

technology evolution has different paths for CDMA based family and 3GPP standards (Appendix

16). The selection of LTE as the choice for the 4th

generation technology by majority of carriers

worldwide and CDMA based Verizon Wireless in US has tilted the balance towards 3GPP

technologies in North America. Moreover, the WCDMA/HSPA technologies provide an easier

migration path to LTE as compared to CDMA technologies. It already has an impact on

Canadian wireless landscape where Bell and Telus have chosen HSPA network as their next

generation wireless technology. It has put CDMA’s evolution path in question in Canada as two

technologies are quite incompatible and it may be difficult to support both of them. Bell and

Telus have already spent over $1 billion overlaying the HSPA network and the new player Wind

Mobile is also offering HSPA/WCDMA network. In this regard, CDMA network and subscribes

will continue to decrease in Canadian wireless landscape.

3 Reported by CDMA Development Group, December 2010

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Decline of 2G technologies: The 2nd

generation GSM technology has over 80%4 of the global

market share and is being used by Rogers in Canada. The subsequent advancements in the 2G

technology are brought by GPRS and EDGE, which has added data networks to the

predominantly voice centric GSM technology. There is a further evolution path of Evolved

EDGE with downlink peak data rates of 1.89 Mbps. But, HSPA networks are marching over the

existing 2G networks and choice for new players like Wind Mobile, Mobilicity and Videotron

are also UMTS/HSPA networks. In this regard, 2G based networks and subscribers will continue

to decline and it may only be used in rural areas.

Decline of WiMAX technology: WiMAX is one of the candidates for the 4G technology but its

utility has been limited due to lack of interoperability with

other cellular technologies. The main proponent of mobile

WiMAX is Sprint Nextel and Clearwire in USA. The

technology has some footprints in Canada also with Craig

wireless, Primus and Sogetel Inc. among others. But,

WiMAX adoption will decline in future and being only

offered as low-cost alternative for limited mobility

broadband services.

Decline in Messaging services of SMS: The emergence of mobile broadband and instant

messaging applications like BBM (BlackBerry Messenger) will limit the utility of legacy

messaging services like SMS. The spread of HSPA and LTE networks will further move the

traffic from SMS services where messaging will be made more content rich with video as in

FaceTime chatting application from Apple.

4 Source: GSMA

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Job Losses in next 5-10 years

The demand for skilled wireless telecommunication specialists is very high in mobile broadband

and advanced network area. However, there are certain areas which are seeing stagnation and

will lose jobs in the coming years. The change in the consumer behavior has led to the explosive

growth of mobile broadband which is expected to increase 26-fold between 2010 and 20155 but

voice traffic is expected to drop significantly in next 5-10 years. So, the jobs will be lost in the

circuit-switched core network side. These losses will be both at operator as well as network

vendor side6.

Other significant area of job losses will be the people directly or indirectly employed in the

maintenance and operation of CDMA based networks. Major Canadian Operators including Bell

and Telus are moving to HSPA and LTE networks and it may result in winding down of their

CDMA and EVDO networks in future. It will cause job losses in the operators as well as

Ericsson and Alcatel-Lucent who are the major vendors for CDMA infrastructure in Canada.

Similarly, the emergence of 3G networks will lead to winding down of the GSM/GPRS/EDGE

networks in the Canadian cities and sub-urban areas. It will also cause job losses at network

operators, equipment suppliers and supplier of support services.

Proprietary protocols developed for M2M services will be overtaken by standardized protocols

developed by big companies like Google Wallet by Google in collaboration with MasterCard.

Similarly, server based mobile services hosted by 3rd

party companies will be replaced by cloud

based services hosted by software giants like Microsoft, Apple and Google. It will lead to job

losses for smaller players in the given sector.

5 Cisco Visual Networking Index: Global Mobile Data Traffic Forecast Update, 2010-12

6 In the real world scenario, the research paper would have forecasted the number of losses but the required data

is not readily available

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Conclusion

Canadian wireless industry is a growing sector and its revenue of $16.9 billion constitutes the

largest component (41%) of the total telecommunication revenues7. The sector is expected to

grow at a CAGR of 9.3% in the five year period of 2009-14. The mobile phone penetration in

Canada is still 79% and is expected to rise to 93.5% by 20208. Another significant trend is the

conversion of feature phone users into smartphone users leading to explosive growth of mobile

broadband market. It is an extremely important growth segment as Tablets, smartphones and

netbooks has higher ARPU9. The MBB is becoming the number 1 service category in terms of

traffic generated on the mobile networks whereas mobile voice traffic will remain limited in

comparison in future. It is recommended that the company should invest in the mobile broadband

market to expand its services and data capacity.

The winning mobile broadband strategy will be availability of high-end and mass market

smartphone devices, service differentiation with pricing based on quality of service and next

generation HSPA+ and LTE networks. The company needs to ensure good wireless coverage,

higher capacity to support video streaming and other bandwidth hungry applications, optimized

smartphones for efficient data transfer and better user experience as well as higher perceived

speed and low latency in the wireless networks. Since the value chain of wireless industry is very

large consisting of carriers, mobile and network equipment vendors, HW and component

supplier, content and application providers, it is imperative for the company to develop the right

ecosystem where value can be shared and increased due to the networking effect. The company

has to work as a cornerstone to nurture and flourish this ecosystem.

7 Source: Canadian Wireless Telecommunication Association

8 Source: National Statistic, Euromonitor International

9 Average Revenue per user

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Appendix A

Political

Canadian governement in the form of Canadian Radio Television and Telecommunications Commission is the

spectrum management organization; sole supplier of bandwidth and licenses. The wireless industry is very

regulated with the oligopoly of big three operators. But In 2008, Canadian government auctioned AWS

spectrum for $4.26 billion with some spectrun blocks reserved for new entrants only. Gobalive was able to win

10MHz spectrum in Toronto whereas Quebecor has won the similar spectrum in Montreal. The further opening

up of this sector by the governement can have have many ramification for the industry.

Economic

The recent global economic recession has also slowed down the growth of canadian wireless sector. It can

play an important rols as it deters carriers from investing in capaital expenditures required for high-spped

networks, better coverage and services. The weakness in economy will continue to adversely impact customer

demand and supplier bases in 2010. The improvement in the economy in 2011-12 time frame will be the right

boost required in the industry with recent announcements about launch of LTE networks in late 2011 or early

2012.

Social

Growing number of Canadians are spending more time on social networks, with facebook being the most

popular. As per eMarketer report (2010), about 15.1 million Canadians have visited social networking sites at

least monthly and it is going to increase to 18.4 million Canadians by 2014. In fact the Canadians, under the

age of 30, have adopted social networking as a part of their normal communication activities. This shift in the

consumer behavior is also due to the mobile technology changes that have brought the ability to communicate

using different apps through their feature rich smart phones.

Technological

The technological advancements in areas such as processing power, nanotechnology and storage capacity has

enabled true ubiquitous mobile access with next-generaation advanced wireless networks with peak downlink

data rates as high as 150 Mbps. It has led to innovative mobile services like health monitoring, location based

services, M-commerce, M-education, M-government and mobile entertainment.

Legal

Government legislation in the wireless sector can significantly increase the barriers to entry by setting rules

and regulation related to infrastructure, distribution channels and networks. Domestic regulations can also be

a discouraging factor for new entrants where it can even legally forbid certain parties to enter the sector as in

the case of Chinese equipment vendors like Huawei and ZTE who are not able to compete for US tenders

Environmental

Canadian geography is very sparsely populated except for some major cities. The population density is only 4

people per sq. km as compared to Europe who have 70 people per sq. km or US with 30 people per sq. km. It

generally translates into higher capital expenditure for the operators.

The International Agency for Research on Cancer (IARC) has recently cautioned that electromagnetic radiations

generated by cellphones and other wireless communication devices can possibly be carcinogenic to humans. It

has just been cautioned as possible link and not a proven one between wireless devices and cancer. But, this

study can have long reaching effect on the industry.

PESTLE Analysis: Canadian Wireless Telecommunication Sector

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Appendix 1

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Appendix 2

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Appendix 3

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Appendix 4

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Appendix 5

Appendix 6

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Appendix 7

Appendix 8

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Appendix 9

Appendix 10

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Appendix 11

Appendix 12

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Appendix 13

Appendix 14

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Appendix 15

Appendix 16

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References

BCE Inc., Morgan Stanley Report, May 2011

BCE Inc., Company Profile, Datamonitor, December 2010

Consumer Lifestyles in Canada, Euromonitor International, February 2011

HSPA+ Understanding the Benefits, GSMA, February 2010

Internet Access in Canada, Datamonitor, February 2010

The 4G LTE Guide, LTE Portal, May 2011

The Benefits of the Wireless Telecommunication Industry to the Canadian Economy, April 2010

Monetising Mobile Boradband Through Services and applications, GSMA, May 2011

Mobile Phones in Canada, Datamonitor, October 2010

Mobile traffic forecasts 2010-2020, a report by the UMTS forum, 2011

Mobile Broadband Evolution: the roadmap from HSPA to LTE, A white paper from UMTS forum,

February 2009

Networking Equipment in Canada, Datamonitor, May 2010

Recognizing the Promise of Mobile Broadband, A white paper from UMTS forum, July 2010

Rogers Communications, Investor fact sheet 4Q10

Solving Spectrum Gridlock: Reforms to Liberalize Radio Spectrum Management in Canada in the Face

of Growing Scarcity, C.D. Howe Institute, May 2010

The Arvani Report, Arvani Group, February 2011

Telecommunication Services in Canada, Datamonitor, September 2010

Telus Corporation, Company Profile, December 2010

Wireless Telecommunication Services in Canada, Datamonitor, September 2010

Wireless Telecommunication Services in United States, Datamonitor, September 2010

Canadian Telecommunication Industry: Voice and data networks

Business