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How does immigration impact the telecommunications sector?

As I noted in January, more than one million immigrants entered Canada in 2022. This has led to a number of political and economic discussions in the country, such as how immigration has contributed to the cost of housing and rental prices. A year and a half ago, I first looked at the impact of immigration on Canada’s mobile markets.

Adding to the discussion, Morningstar DBRS recently released a report, “Canada’s Immigration Influx Spurring Telecom Subscriber Growth”. The report identifies these key highlights:

• Canada’s immigration influx has fueled Telecom subscriber growth.
• Reduced immigration inflow or maturing wireless market could significantly increase market competition.
• Over the near-to-medium term, Telecom players have a number of levers to mitigate such headwinds; however, continued investments are required to boost network and technological advancements.

The report says that Canada’s population growth continued to lead its G7 partners in 2023 and likely among the 20 fast growing countries in the world last year. “Canada’s population growth of 3.3% during the first nine months of 2023 had already exceeded the total growth for any other full-year period since Confederation in 1867 following a record growth of 2.74% in 2022. Ninety-six percent of this population growth came from international migration.”

While much of the discussion of high population increases has focused on pressures on accomodations, healthcare, and infrastructure capacities, Morningstar DBRS has joined other financial analysis in identifying the implications of high immigration for Canada’s telecom sector. Further, Morningstar DBRS says plans to admit 500,000 immigrants annually will continue to provide future growth.

Of course, the flip side is the potential for a shift in the flow of people. Will political pressures lead to lower rates of immigration? Will high costs of living contribute to people leaving Canada?

Overall, mobile prices continue to decline. Rates of mobile adoption are approaching 100%, creating a more mature market. Morningstar DBRS also notes changing policy and regulation as factors that can impact the industry. How will the market react?

Some wireless carriers are expanding into adjacent markets, such as residential broadband, by offering fixed wireless access to reach homes outside their wireline service areas.

The Morningstar DBRS report complements the agency’s “Global Telecommunications Outlook: Highlighting the Critical Nature of Connectivity” issued 2 months earlier. That report identified challenges facing telecom worldwide, while recognizing overall resiliency of the sector. “We anticipate a more conservative approach to capital allocation going forward.” We have seen that in Canada.

When I started in the telecom industry, there used to be a department in the phone company that would produce a “General Planning Forecast” to help guide our analysis of traffic and equipment utilization, and to support capital spending requirements. It is important to understand these kinds of economic trends, anticipating such factors as the immigration impact on investment and markets.

Do regulators and policy makers appreciate these issues?

Will lower cost connections get more people online?

That is the objective of a number of initiatives being offered by telecom companies across the country. Programs provide devices and services to disadvantaged individuals and families.

Long time readers of this blog will recall that Rogers launched its Connected for Success internet program, the first-of-its-kind program in Canada in 2013 in Toronto. The company expanded the program to subsidized tenants and members of housing partners across the Rogers internet footprint in Ontario, New Brunswick and Newfoundland. In 2021, Rogers added new speed options and TV bundles to meet customers’ evolving needs and expanded eligibility to make the program available to more low-income Canadians. Over the past year, the program expanded across Western Canada and Northern Ontario; a new national Connected for Success wireless 5G program was launched.

Rogers offers an array of services branded under Connected for Success. According to Rogers, Connected for Success is available for over 2.5 million eligible recipients of Provincial income support, Provincial disability benefits, Rent-geared-to-income tenants of a non-profit housing partner organization, Seniors receiving the federal Guaranteed Income Supplement, or the Resettlement Assistance Program. In addition, households receiving the Maximum Canada Child Benefit and Maximum Guaranteed Income Supplement are eligible through the federal Connecting Families program described below.

• Rogers Connected for Success 5G mobile plan features: Access to 5G/5G+ network; 3GB (at speeds up to 256 Mbps). Data at reduced speeds thereafter;
  Unlimited Canada-wide talk and text; Unlimited international texting and picture/video messaging from Canada; U.S. & International Preferred Rate included; Call Display with Name Display; Voicemail; Call Waiting and group calling; Access to Roam Like Home; 2,500 Call Forwarding Minutes; and, Spam Call Detect. Customers can also get a no-cost 5G smartphone with financing as long as they keep this mobile plan for 24 months. (Customers can bring their own 5G-enabled device if preferred.)

TELUS offers a portfolio of services branded under“Connecting For Good”:

• Mobility for Good: Mobility for Good for youth provides a free smartphone and plan to youth aging out of foster care, helping them successfully transition to independence. Mobility for Good for seniors provides access to a discounted smartphone and low-cost mobility rate plan for Canadian seniors receiving a Guaranteed Income Supplement (GIS) amount of $6,500 or more annually, ensuring that they stay connected to loved ones and can access important resources and information.
• Internet for Good: TELUS Internet for Good offers low-cost, high-speed Internet to qualified low-income families and seniors, youth aging out of care and people with disabilities in need.
• Tech for Good: Available nationwide, Tech for Good helps improve quality of life, independence and personal empowerment of people with disabilities by offering customized recommendations and training on assistive technology for mobile devices, computers and laptops.
• Health for Good: TELUS Health for Good initiatives like mobile health clinics and free or low-cost access to TELUS Health MyCare™ counselling and TELUS Health Medical Alert services make healthcare more accessible for marginalized individuals who often face significant barriers accessing quality health care.

Nationally, lower cost connections are available to eligible low income households, branded under the federal government’s Connecting Families Initiative. This program is overseen by Innovation, Science and Economic Development Canada (ISED). The costs are covered by various Internet Service Providers across Canada.

There are 2 plans offered under Connecting Families.

• Plan 1: $10 per month which includes: Up to 10 Mbps download speed; 1 Mbps upload speed; 100 GB of data.
• Plan 2: $20 per month which includes: Up to 50 Mbps download speed; 10 Mbps upload speed; 200 GB of data.

There are Connecting Families service providers nearly everywhere in Canada: Access Communications Co-operative; Beanfield Technologies; Bell Canada (including Bell Aliant and Bell MTS); Cogeco; Coopérative de câblodistribution de l’arrière-pays (CCAP); Hay Communications; Mornington; NorthwestTel; Novus Entertainment; Quadro; Rogers; Rural Net; SaskTel; Tbaytel; TELUS; Vidéotron; and, Westman Media Cooperative.

There are still too many Canadians who aren’t online despite all of these options for lower cost connections for internet and mobile services and devices. As we have discussed before, there are non-price factors inhibiting people from connecting to broadband services.

Alberta recently launched a free digital literacy training program, available in English and French, with 19 courses divided between Basic and Intermediate streams. I’ll have more about this in the coming weeks.

What more do we need to do to get more people online?

Do people have a BS blindspot? How many people think they are better at detecting misinformation than in reality?

Canadian psychologists, Shane Littrell (University of Toronto) and Jonathan Fugelsang (University of Waterloo) have been examining misinformation for a number of years. Last year, their paper in Thinking and Reasoning revealed a somewhat dangerous paradox. It seems the more confident we are in being able to distinguish between truth and misinformation, the more likely we are to be susceptible to false information: what they call the BS blindspot. Not only do the people worst at detecting misinformation think their abilities exceed reality, they also think they are better than most.

As I have been writing over the past few months (December’s “Creating more sophisticated content consumers”, and January’s “Dealing With disinformation”), we need to understand how to counter misinformation.

Littrell and Fuselsang have a new study released in Applied Cognitive Psychology [pdf, 4 MB] found “that asking people to reflect on why they find certain statements meaningful helps reduce receptivity to some types of misinformation but not others.”

It seems that much depends on the source of the information. The researchers found that claims from perceived experts can be largely immune to the kinds of interventions relying on reflective thinking.

In Illuminating human bias and our ability to be misled, Waterloo quotes Professor Fugelsang endorsing a long-term digital literacy strategy. “We need to teach misinformation awareness, healthy skepticism and encouraging reflective thinking early on in life — as early as elementary school.”

Is reflection the best medicine to treat an epidemic of misinformation? It depends. But, Littrell and Fugelsang suggest a reflective pause for anyone encountering information related to health, finance or politics, especially online.

We need to become more sophisticated consumers of content and information, to see past the BS blindspot. It needs to be considered a key component of improving our overall digital literacy.

We all want reliable and resilient networks. Telecom policy makers, regulators, network planners, service provider executives, customers (large and small), all of us want our communications networks to be available – always. So why aren’t they?

Over the past 4 years, with so many of us working for home, there is an even greater dependence on our voice and data networks. Working from home, schoolwork and classes online, streaming video for entertainment, gaming hand health applications all mean that degradations in data communications are effectively the same as being out-of-service. We have come to expect perfection from our networks, even as competitive pressures drive down prices for service, despite inflationary pressures in the rest of the economy.

How do service providers increase network resilience to meet consumer expectations? When I wrote about the subject last April, I observed, “With all the best preparations in the world, networks will still sometimes go down.” I noted the CRTC’s own storm-related system failure from a week earlier. A year and a half ago, I pointed out that the Rogers network failure of 2022 wasn’t even the biggest network outage that week – KDDI had 40 million customers off the air for 3 days. And just two months ago, Australia’s Optus disrupted service to 10 million customers for 12 hours.

Networks sometimes go down.

In the olden days, defined as the BC era (before competition), telecom rates were regulated in a way that provided monopoly service providers with an opportunity to earn a reasonable rate of return on their investments. Since those rates were tied to capital spending, the Canadian regulator held annual Construction Program Reviews, looking at various categories of planned capital spending, which were tied to various categories of spending and a wide range of service objectives. In this way, the regulator was able to set measurable service standards, and review the levels of capital investment to meet those objectives. The outcome of the review would usually be that the CRTC found the program plans to be reasonable.

Those days are long gone. The overwhelming majority of revenues for most service providers are from unregulated rates. The majority of capital spending is “at-risk” investment, tied to success in the marketplace.

Before the holidays, I noticed a December survey released by a UK-based consumer advisory site. That survey found that 1 in 3 UK households experienced a broadband outage of some kind in the previous 12 months. When asked how many service interruptions exceed 3 hours, the average number of incidents was 33.

It is a remarkably high level of service disruption, but the December results represent an significant improvement over a similar survey conducted 3 months earlier.

Networks will still sometimes go down and weather-related service disruptions will likely be a bigger factor in the coming years.

In a competitive environment, what is the role of regulators in setting standards or objectives for reliable and resilient networks?

Which of my blog posts were the Top 5 in 2023, the ones that attracted the most attention?

Looking at the analytics, these 5 articles had the most individual page views:

1. “Incubating innovation” [November 22, 2022]
2. “3800 MHz auction preview” [May 25, 2023]
3. “The economics of broadband revisited” [March 28, 2023]
4. “Dealing with online harms” [January 24, 2023]
5. “#CHPC reviews government funding of antisemitism” [February 16, 2023]

Honourable mentions go to:

• “Canada’s future depends on connectivity” [August 15, 2020]
• “Stinky fish” [May 11, 2023]

Fascinating to see that one of my posts from 2020 continues to attract so much interest from so many readers.

Which posts resonated the most with you? I posted my year-end wrap-up just last week, so it hasn’t had a chance to crack the Top 5… yet!

Thank you for following me here on this blog and on Twitter, and thank you for engaging online and by phone over the past year.

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I hope the coming holiday period provides an opportunity to connect with your family and friends. Let me reiterate my very best wishes for health, happiness and peace in the year ahead.