{"id":16503,"date":"2022-07-26T13:02:10","date_gmt":"2022-07-26T17:02:10","guid":{"rendered":"http:\/\/mhgoldberg.com\/blog\/?p=16503"},"modified":"2022-08-10T21:48:07","modified_gmt":"2022-08-11T01:48:07","slug":"telecom-market-concentration","status":"publish","type":"post","link":"https:\/\/mhgoldberg.com\/blog\/?p=16503","title":{"rendered":"Telecom market concentration"},"content":{"rendered":"<p>How concentrated is Canada&#8217;s communications market? I guess the answer depends on answering &#8220;compared to what&#8221;?<\/p>\n<p>If we want to examine how concentrated Canada&#8217;s market is compared to other countries, there is a reasonable way to measure that, known as the Hirschman-Herfindahl Index (HHI). To calculate a Herfindahl-Hirschman Index, take the percentage market share of each firm in a sector (measured as a whole number), square that number, and then add all of those squares together. You end up with a number between 1 and 10,000. <\/p>\n<p>If there is one player in the market, with 100% share, the HHI is 100&#215;100 = 10,000. If there are 3 players with say, 40%, 30% and 30% share respectively, then the HHI is calculated as 40<sup>2<\/sup> + 30<sup>2<\/sup> + 30<sup>2<\/sup> = 1600 + 900 + 900 = 3400<\/p>\n<p>As described by the Economist Intelligence Unit, HHI views the concentration of global telecom markets as: <\/p>\n<ul>\n<li>HHI < 3,000 \u201cunconcentrated\u201d; <\/li>\n<li>HHI 3,000-4,000 \u201cmoderately concentrated\u201d; <\/li>\n<li>HHI > 4,000 \u201chighly concentrated\u201d<\/li>\n<\/ul>\n<p>So, let&#8217;s look at the question from that perspective. Compared to our peers, how concentrated is Canada&#8217;s telecom market? Here is what the Economist <a href=\"https:\/\/impact.economist.com\/projects\/inclusive-internet-index\/2022\" rel=\"noopener\" target=\"_blank\">Inclusive Internet Index<\/a> is reporting:<\/p>\n<div align=center>\n<table style=\"width:450px\">\n<caption><strong>Hirschman-Herfindahl Index<br \/><em>G7 + Selected Comparable Countries<\/em><\/strong><\/caption>\n<thead>\n<tr>\n<th><em>Country<\/em><\/th>\n<th style=\"text-align: center;\"><em>Wireless HHI<\/em><\/th>\n<th style=\"text-align: center;\"><em>Broadband HHI<\/em><\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>Canada<\/td>\n<td style=\"text-align: center;\">2627<\/td>\n<td style=\"text-align: center;\">1416<\/td>\n<\/tr>\n<tr>\n<td>Australia<\/td>\n<td style=\"text-align: center;\">4006<\/td>\n<td style=\"text-align: center;\">2724<\/td>\n<\/tr>\n<tr>\n<td>France<\/td>\n<td style=\"text-align: center;\">2604<\/td>\n<td style=\"text-align: center;\">2684<\/td>\n<\/tr>\n<tr>\n<td>Germany<\/td>\n<td style=\"text-align: center;\">3378<\/td>\n<td style=\"text-align: center;\">2704<\/td>\n<\/tr>\n<tr>\n<td>Italy<\/td>\n<td style=\"text-align: center;\">2796<\/td>\n<td style=\"text-align: center;\">2518<\/td>\n<\/tr>\n<tr>\n<td>Japan<\/td>\n<td style=\"text-align: center;\">3353<\/td>\n<td style=\"text-align: center;\">2031<\/td>\n<\/tr>\n<tr>\n<td>New Zealand<\/td>\n<td style=\"text-align: center;\">3465<\/td>\n<td style=\"text-align: center;\">2448<\/td>\n<\/tr>\n<tr>\n<td>Sweden<\/td>\n<td style=\"text-align: center;\">2731<\/td>\n<td style=\"text-align: center;\">1958<\/td>\n<\/tr>\n<tr>\n<td>South Korea<\/td>\n<td style=\"text-align: center;\">3538<\/td>\n<td style=\"text-align: center;\">3003<\/td>\n<\/tr>\n<tr>\n<td>United Kingdom<\/td>\n<td style=\"text-align: center;\">2807<\/td>\n<td style=\"text-align: center;\">2020<\/td>\n<\/tr>\n<tr>\n<td>United States<\/td>\n<td style=\"text-align: center;\">3231<\/td>\n<td style=\"text-align: center;\">1613<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<p>As can be seen in this table, Canada&#8217;s wireless and wireline communications markets are less concentrated than our international peers. Indeed, of the 100 countries examined this year, the Economist Inclusive Internet Index ranked Canada&#8217;s Broadband market as the least concentrated and ranked the Wireless market concentration as the 90th of 100. <\/p>\n<p>As <a href=\"https:\/\/mhgoldberg.com\/blog\/?p=16454\" rel=\"noopener\" target=\"_blank\">I mentioned two weeks ago<\/a>, a review of the <a href=\"https:\/\/www.5gamericas.org\/resources\/deployments\/\" rel=\"noopener\" target=\"_blank\">world\u2019s LTE deployments<\/a> shows that there are 10 LTE networks operating in Canada compared to 9 in the US, 3 or 4 in most European countries (Russia has 9; Sweden has 6; Denmark has 5). <\/p>\n<p>These are important factors when considering network diversity for overall resilience of Canada&#8217;s communications infrastructure.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>How concentrated is Canada&#8217;s communications market? I guess the answer depends on answering &#8220;compared to what&#8221;? If we want to examine how concentrated Canada&#8217;s market is compared to other countries, there is a reasonable way to measure that, known as the Hirschman-Herfindahl Index (HHI). To calculate a Herfindahl-Hirschman Index, take the percentage market share of &hellip;<\/p>\n<p class=\"read-more\"> <a class=\"\" href=\"https:\/\/mhgoldberg.com\/blog\/?p=16503\"> <span class=\"screen-reader-text\">Telecom market concentration<\/span> Read More &raquo;<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_uag_custom_page_level_css":"","two_page_speed":[],"footnotes":""},"categories":[1],"tags":[],"class_list":["post-16503","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.6 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Telecom market concentration &#8226; Telecom Trends<\/title>\n<meta name=\"description\" content=\"How concentrated is Canada&#039;s communications market? 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I guess the answer depends on answering &#8220;compared to what&#8221;? If we want to examine how concentrated Canada&#8217;s market is compared to other countries, there is a reasonable way to measure that, known as the Hirschman-Herfindahl Index (HHI). To calculate a Herfindahl-Hirschman Index, take the percentage market share of&hellip;","_links":{"self":[{"href":"https:\/\/mhgoldberg.com\/blog\/index.php?rest_route=\/wp\/v2\/posts\/16503","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mhgoldberg.com\/blog\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mhgoldberg.com\/blog\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mhgoldberg.com\/blog\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/mhgoldberg.com\/blog\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=16503"}],"version-history":[{"count":0,"href":"https:\/\/mhgoldberg.com\/blog\/index.php?rest_route=\/wp\/v2\/posts\/16503\/revisions"}],"wp:attachment":[{"href":"https:\/\/mhgoldberg.com\/blog\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=16503"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mhgoldberg.com\/blog\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=16503"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mhgoldberg.com\/blog\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=16503"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}