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Canadian Telecommunication Industry: Voice and data networks

Oct 17, 2014

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Business

The case analysis has been done for the MKTG 6650 course during summer 2011 class of Schulich School of Business

Case Study: The IKEA Company

MKTG 6650S (Summer 2011)

Section S

Professor Jane-Michele Clark

Voice and Data Networks

June 14th

2011

Ajay Singh

MKTG 6650S

Voice and Data Networks

1

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

MKTG 6650S

Voice and Data Networks

2

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

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

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

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

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

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

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

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

MKTG 6650S

Voice and Data Networks

3

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.

MKTG 6650S

Voice and Data Networks

4

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