Canadian Internet Use
Survey Residential - 2005
Two-thirds of adult Canadians surfed the Internet in 2005, and those living in larger cities were much more likely to have done so than those in rural areas and small towns, according to the new Canadian Internet Use Survey.
An estimated 16.8 million adult Canadians, or 68%, used the Internet for personal non-business reasons during the 12 months prior to the survey.
Only 58% of residents living in small towns or rural areas accessed the World Wide Web, well below the national average. In contrast, rates in Canada's largest census metropolitan areas ranged from 68% in Montreal to 77% in both Ottawa-Gatineau and Calgary.
The survey also showed that the Internet has changed the way many Canadians do banking and access news. Roughly 6 of every 10 Internet users used it to read news or sports, or to conduct their banking online. Even so, three-quarters of Canadians expressed strong concerns about privacy and security.
The new survey, which replaces the Household Internet Use Survey, was redesigned to focus on individual Internet use. The CIUS did show that in 2005, an estimated 7.9 million Canadian households (61%) were connected to the Internet, up slightly from the nearly 60% reported in 2004 by the Survey on Household Spending.
Source: Statistics Canada - the Daily - August 15, 2006
Majority had high-speed Internet connection5
The majority of home users reported accessing the Internet over a high speed connection, according to the survey (only home users not accessing the Internet by cable or satellite were asked about high speed).
About 50% who accessed the Internet at home did so using a cable line connected to a computer, while 44% used a telephone line connected to a computer.
However, of the group that used a telephone line, about 59% reported it was a high-speed connection (cable Internet service providers typically offer a range of package options with various speeds, all faster than conventional dial-up service).
An estimated 2.7 million individual home users reported that they did not use a high-speed connection to access the Internet in 2005. They accounted for about 18% of all home users.
Among these individuals, just over one-third (922,250) reported that a high-speed Internet service (either cable or phone) was not available in their area. Almost 70% of these people lived in smaller towns and rural areas.
Source: Statistics Canada - the Daily - August 15, 2006
Broadband and Consumer E-Commerce in Canada
April 2007 Review
In Canada, broadband is defined as speeds in excess of 64Kbps, a lower threshold than in other countries. This partially accounts for Canada's high broadband penetration rate.
Researchers agree that an Internet broadband connection is an enabler of online buying. With a dial-up connection, pages load slower and transactions take more time to complete. For 2004, researchers estimate that 5.2 million Canadian households will have a broadband connection, accounting for 66% of online households. By 2007, 81% of online households will have a broadband connection.
Historical and projected estimates of Canadian broadband households vary among leading research firms. What is certain is that broadband uptake has been strong and will continue to grow in the future.
In 2000, only 12.1% of all Canadian households had a broadband connection. In 2004, it is expected that the penetration rate will increase to 42.6%. The US, in contrast, is not expected to achieve a comparable penetration until 2006. The current penetration rate in the US is only 29.1%. By 2006 it is expected to reach 41.0%.
For 2003 Canada ranked fourth worldwide in terms of broadband households as a percentage of total households. The US held the tenth position with a 22.5%.
Canadian retail e-commerce just tallied its fifth straight year of double-digit growth, yet online sales still account for less than 1% of the total retail market, according to Statistics Canada's "2006 Survey of Electronic Commerce and Technology."
Online sales more than doubled in Canada from 2003-2006, and nearly half of Canadian retail firms now have a Web site, compared to the 42% that did in 2005. Among companies with 100 employees or more, of which 88% have a Web site, the percentage is even higher.
It is expected that the average amount that Canadians spend online will grow strongly over the next three years. Seasoned online buyers (rather than new ones) will drive overall market growth. Comparing Canadian and US online consumer behavior, Canadians are either on par or ahead of their US peers in purchasing electronics, travel and event tickets online. Canadians lag behind in the purchasing of clothing, music and videos, gifts and toys. Canada is a world leader in Internet adoption, time spent online and electronic banking and bill payment.
The Canadian telecoms market was one of the few to weather the storm after the telecoms bubble burst, with revenues increasing between 1999 and 2002 - however 2003 saw a slight plateau in total revenues as the local operators were hit hard by both increasing competition and the shift from fixed-lines to mobile phones.
That said, it is still an attractive market for both operators and users - in terms of broadband penetration, it is one of the leading countries in the world. Broadband services are being driven by a government regulator keen to establish Canada as a leading information economy and an attractive country for investment. Both cable modem and DSL services are achieving high levels of penetration.
The high penetration of broadband Internet access is also fueling the growth in other industries, such as interactive and digital TV services and ecommerce. The opportunities for IP-VPN services has also increased as the proliferation of broadband access has made teleworking more of an option for more employees of companies in Canada.
Cable TV subscriptions have been declining over the past few years as DTH satellite services have become more popular due to better pricing and a greater range of services on offer. Cable will, however, continue to dominate the pay TV market in Canada due to its existing presence and the fact that many customers also use the cable for data services. The growth in mobile phone services is beginning to mimic what was witnessed in Europe a few years ago and the US in 2003. Consolidation in this segment is on the horizon, with Telus looking to acquire Microcell. This will create a healthier market, with three leading operators competing for customers and expanding their network coverage. In 2005 we expect the operators to make a move towards more advanced 3G services to complement their existing Wi-Fi offerings.
Bundling of services has been the catch-phrase in the Canadian market in 2003 and 2004 - many operators are partnering or acquiring in order to make a play across technologies and solutions. This is seen as a way to increase the revenue per customer, reduce churn, and compete with the incumbent (Bell Canada) on relatively even footing.
The market will continue to consolidate and align itself across regions and customers will be the big winners, with a greater range of services offered by a larger pool of operators. While the gold rush may be over for Canadian telecoms operators, there is still a pretty penny to be made in this market.
By the beginning of 2004, total revenues in the telecom market reached an estimated $32.6 billion (down 1.2% on 2002). Industry revenues had grown from $24.9 billion in 1998. Capex continues to decrease from the big spending years of 2000 and 2001 - down to $5.3 billion in 2003. Since 1997 Canadian telecoms operators have spent over $60.7 billion on capital expenditures.
Local competition now exists throughout most of Canada - although the incumbent operators still hold the lion's share of the market. A number of major acquisitions took place: MTS acquired Allstream and Telus is in the process of acquiring Microcell - the competitive environment is shifting. Telecom infrastructure continues to undergo modernisation projects driven by increased competition, liberalisation of telecom policy and government initiatives aimed at extending broadband reach.
Canada has one of the highest rates of Internet usage in the world. Furthermore, Canadians are heavy users, with around 90% of users using e-mail at least weekly. The Canadian Internet access market continues to grow strongly with over 64% of Canadians having Internet access by 2004.
Residential broadband access enjoyed continued growth in 2004 as the increase in dial-up accounts slowed. High-speed household cable Internet access continues to maintain its lead over household Digital Subscriber Line (DSL). There were around 5 million residential broadband subscribers in early 2004.
Canada is also seen as a world leader in e-commerce. The government has actively encouraged initiatives, including the development of digital and broadband networks, to develop high-speed access throughout the country suitable for wireless and Internet applications.
The country's mobile industry has experienced rapid growth since its inception and demand is expected to remain strong for the foreseeable future. With the number of subscribers to wireless products and service totalling close to 13.9 million by mid-2004, almost 43% of Canadians now have access to a wireless device.
Canadian broadcasting has seen major changes during the last three years with the growth of specialty television services stimulating structural changes within the industry. The deployment of digital technology will eliminate bandwidth scarcity, enabling the offering of numerous new services, including interactive TV. The number of cable TV subscribers declined slightly in 2003 to 7.8 million. The number of DTH satellite TV subscribers increased from 2002 to 2.2 million at the beginning of 2004.
Source: http://www.internetworldstats.com
| Internet Usage and Population Growth in Canada; 2000-2007 | ||||
|---|---|---|---|---|
| Year | Population | Users | % Penetration | Source |
| 2000 | 31,496,800 | 12,700,000 | 40.3 % | ITU |
| 2003 | 32,050,369 | 20,450,000 | 63.8 % | C.I.Almanac |
| 2005 | 32,440,970 | 21,900,000 | 67.5 % | C.I.Almanac |
| 2007 | 32,440,970 | 22,000,000 | 67.8 % | ITU |