5 Oct 2011Canada Broadband Overview

Since the early 1990s the Canadian telecommunications market has been undergoing a process of progressive liberalisation. Competition was introduced firstly in the long-distance market, then the cellular market followed by the local fixed-line market. Canada made an early start with broadband and its initial development was managed relatively well, attaining the second highest broadband population penetration in the world by 2002. However, since then, Canada’s position has slipped dramatically. In the past few years Canada has made some progress, rising from 20th in the OECD in terms of broadband population penetration to its current ranking of 11th. Canada’s broadband markets have also ranked poorly in terms of prices and speeds.

Canada’s poor performance led to calls for a lighter-handed regulatory framework, and as a result several reforms were legislated in 2007 which resulted in the Canadian regulator issuing decisions in relation to numerous local residential fixed-line markets across Canada. Broadband deployment continues to progress under active government encouragement, with over 95 per cent of Canadians living in communities served by high-speed Internet access by 2010. However, while government policy has encouraged widespread availability, Canadian regulatory policy has also been blamed for the country’s poor ranking in world standings for broadband services. Limits on foreign ownership and inconsistent regulatory decisions, have lowered the amount of competition needed to spur new and better offerings.

Cable still leads DSL in terms of subscriber numbers, with DOCSIS 3.0 upgrades reigniting cable subscriber growth. The growing demand for converged voice, data and TV services has been a strong driver behind the deployment of Next Generation Networks (NGN), in particular IP-based networks. Although many of these developments have been led by the cable companies, the ongoing decline in traditional fixed line revenues is compelling the incumbent telcos to modernise their network infrastructure. DSL operators such as Bell Canada and SaskTel have invested large sums of money in FTTN and VDSL services that allow them to offer the same services as their cable counterparts. In contrast, despite the large number of WiMAX spectrum licences in the market, WiMAX developments have been largely a niche market. This may change with Barrett Xplore’s plans for a nationwide WiMAX network complimented by a 4G satellite network by 2012.