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Yesterday, Statistics Canada released data from the 2012 Survey of Household Spending providing a glimpse of what kind of equipment is in the homes of Canadians and how we spend our money each month.

It didn’t take long for some to misunderstand some of the data on communications services spending. “Cellphone costs hit historical high: Statistics Canada” read one of the headlines, leading Open Media to tweet out a call to action by its followers.

Monthly cellphone spending is different from costs.

Prices are lower, so more households have more phones, as the detailed Statistics Canada data shows:

• Households with at least one cellphone increased to 81.4% in 2012 (up from 79.4% in 2011);
• Households with exactly one cellphone declined to 35.5% from 36.5%;
• Households with exactly 2 cellphones increased to 29.2% from 28.0%; and,
• Households with 3 or more cellphones jumped to 16.7% from 14.9%.

The monthly bills went up because there are more devices in the average household.

There was other data that I found interesting in the release, despite the numbers being a year old.

• Households with a home computer declined year over year to 84.1% from 84.5%. While this is a statistic on person ownership of computers (as contrasted with a device provided by an employer), the number is headed in the wrong direction.
• Computer ownership is the denominator that should be used to measure penetration of internet access. Households with internet access increased to 81.5% in 2012 from 80.5% in 2011. That represents 96.9% of households with a computer, up from 95.3%. Only 3.7% of households used dial-up connections in 2012, down from 5.2%.
• Despite all of the talk of cord-cutting for TV services, Statistics Canada found 88.3% of us had a wired or satellite TV service in 2012, up from 87.4%.

We will be looking at all of these trends at The 2014 Canadian Telecom Summit, taking place June 16-18 in Toronto.

Here is a look at just one of the panels, that will discuss the continuing evolution of TV, from a wide variety of perspectives.

Have you registered yet^

Scotia Capital released a report earlier today called: “Embrace the Evolution: Analyzing the Financial Impact of Changes in Pay TV, Broadband, and Home Phone Services.”

Among its findings, Scotia says the business rationale for cable consolidation is increasing. “In Canada, we believe the combination of Rogers Communications and Shaw Communications makes more business sense than ever before.”

Some of the highlights include:

• Cable and telco wireline revenue growth will remain positive, at approximately 1.0%-1.5% over the next 10 years, as the industry’s focus shifts from traditional pay TV and home phone to broadband Internet;
• Over the next 10 years, cable and telco wireline EBITDA growth will be approximately 2.5%-3.0%;
• Cable and telco wireline cash flow (cash EBIT) growth will be in the range of 4.5%-5.0% over the next 10 years, primarily driven by EBITDA growth;
• Cablecos will show higher growth than telco wireline segments over the next 10 years;
• Although the long term view is growth over a 10 year period, there remain challenges over the next few years;
• Canadian pay TV segment is about to experience more revenue and margin pressure than ever before;
• To protect the TV business and to enhance the user interface and experience, pay TV operators will shift capex toward cloud architecture and IP video delivery;

Scotia Capital observed that telephone companies have been experiencing residential phone decline (driven by wireless substitution) for many years and cable companies are now seeing it, too. “We estimate that, in 2013, over 500K lines were cut because of wireless substitution – the highest annual figure ever for this metric in Canada.”

It is worth the time to read the analysis, led by Jeff Fan.

Jeff will be moderating a session at The 2014 Canadian Telecom Summit called “The Continuing Evolution of TV.”

Have you registered yet?

Here are two new reports that make for important reading.

First, Scotiabank Equity Research has released an update of its March report, called “Canadian Wireless Myths and Facts 2.0”.

Here are some of the highlights.

Myth 2.1: VZW will bring cheaper wireless prices to Canada.
Fact: VZW’s prices in the United States for data share plans are on par to 10% more expensive than the new equivalent Canadian two-year shareable data plans

Myth 2.2: The Canadian regulators are helping consumers by lowering prices and increasing choices.
Fact: By introducing the Wireless Code, the CRTC has caused carriers to raise monthly smartphone prices by 9%-19% over the past few weeks and have caused the carriers to remove the three-year contract option.

Myth 2.3: Industry Canada is pro-fourth operator in every region.
Fact: The “old” fourth operators are not going to get any help from Industry Canada.

Myth 2.4: Canadian regulator and consumer advocacy groups believe Verizon will bring sustainable competition to the Canadian wireless market.
Fact: Even VZ does not believe the current Canadian wireless policy will bring sustainable competition.

Contact Scotiabank for a copy of the full report.

In Scotia’s support for its myth 2.4, there was a link to a report (“Spectrum Auctions Around the World” – Full report [pdf]) from US lobby group Mobile Future. The release for that report says:

In Canada and several European countries, restrictive and preferential policies intended to encourage market entry distorted the auction process and were unsuccessful in expanding the number of sustainable competitors in the marketplace. Initial changes in the competitive landscape were proved fleeting as market forces drove a return to pre-auction market structure with the same number of, or fewer, national competitors.

What makes the report especially newsworthy is that the membership of Mobile Future includes global heavyweights such as Cisco, Ericsson and Qualcomm as well as AT&T and Verizon.

Both of these reports are important contributions to the current wireless policy discussions in Canada.

As you may have read last week, Industry Minister Christian Paradis was supposed to be delivering the closing address on June 5 at The 2013 Canadian Telecom Summit.

Over the course of the 3 day event, taking place June 3-5 at the Toronto Congress Centre, we will explore many areas that should provide guidance for moving forward, whether or not the government sets out a formal strategy.

For example, a panel on Wednesday June 5 will be looking at “Building an Innovation Economy”, exploring the issue from all angles.

Other panels are examining the next generation of wireless, looking at consumer issues (and available recourse for consumer complaints), the evolution of service provider business models and much, much more.

Once again, Canadians find ourselves drifting aimlessly with uncertainty guiding the evolution of Canada’s digital economy. It is a sector filled with activity. Wireless new entrants are in transition; investors are faced with changing rules and a lack of clarity about the transfers of spectrum. Consumers continue to increase their demand for flexible connectivity for voice, data, image and entertainment. Machine to machine communications means more devices talking to each other with significant impact on networks and security.

You need to be at The 2013 Canadian Telecom Summit, just 4 weeks away. Have you registered yet?

Continuing Professional Development: Some of the time spent attending substantive sessions at The 2013 Canadian Telecom Summit can be claimed as “Substantive Hours” towards LSUC’s CPD requirements.

Register today! Download the complete conference brochure here.

It’s settled. Canada’s wireless sector is fiercely competitive according to Industry Minister Christian Paradis.

In Monday morning (April 15), the Minister held a conference call to discuss highlights of his trip to Asia. According to the transcript of the call, there was an exchange with Andrew Mayeda of Bloomberg News:

Question: Hi, Minister. I wanted to ask you about the wireless market back home in Canada. There have been reports that now it’s not just Wind Mobile that is potentially on the block, that also Mobilicity and Public Mobile are potentially for sale and that there’s a high possibility that those companies could end up going to the incumbents. You said publicly that you’d like four major wireless carriers in every part of the country. Are you concerned about the way things are going right now? And what steps might you take to deal with the situation?

Hon. Christian Paradis: First of all, of course this is – I always – you know, I always said that I acknowledge that this is a fierce sector in terms of competition. The competition is very high. Consolidation of course might occur but on the other hand I think we put the best policies in place in order to enhance the fact that we can have a fourth player in each region of the country in terms of competition and more investments. We also launched consultations about – about the transfer – the licenses – transfer criterias so now we are listening to what the industry has to say. But I think that we are on the right track to – in terms of policy. Of course it’s a work in progress. We will see what’s going on but I still remain confident that we will achieve our goal.

A fierce sector in terms of competition. If so, what is motivating the expanded roaming and tightened tower sharing rules announced in early March?

Jeff Fan from Scotiabank issued a new report yesterday, warning “A messy situation may be developing for Industry Canada.”

For IC, it’s a case of catch 22. If it doesn’t allow the transfers, it risks legal action. If it allows, we have consolidation. This may turn out to be a no-win situation. As we have noted before, we think IC should declare victory while it is ahead. Don’t fight a battle that cannot be won. Stop listening to the consumer activists and groups criticizing the wireless industry with outdated information. Canada is not large enough to support four facility-based competitors. IC should focus on the CRTC code to protect consumers and provide the CRTC with more power to enforce the code appropriately.

The fact that the United States is having a difficult time creating a viable third should be a lesson for Canada that a viable fourth carrier in every region of Canada is a long shot.

These points should provide be some interesting fodder for discussions arising at The Canadian Telecom Summit in June. Are you registered yet?