5 September 2002 – Every developed country has a higher cellphone penetration than Canada. It�s time for the country to emerge from its transition stage.
By Ben Macklin
The Canadian wireless sector is something of a curiosity. Canada is one of the most technically advanced countries in the world, there is a very high penetration of PCs and internet access, the country has a broadband penetration rate double that of the United States, and it is home to innovative wireless companies such as Nortel and Research in Motion. Yet, Chile, Malta and Croatia, along with every developed country in the world, has a higher cellphone penetration than Canada, according to the International Telecommunication Union.
What�s up with that?
The Canadian wireless market is very much in a transition stage at the moment. On one hand, more than one-quarter of Canadian cellphone subscribers still use an analog (1G) phone, while at the same time wireless operators are rolling out �next generation� wireless networks. For the consumer, this translates into a confusing range of choices of technologies, handsets, services and coverage.
While analog mobile services are in the process of being phased out in Canada, there were as many AMPS subscribers as there were CDMA subscribers at the end of 2001, according to wireless research firm EMC. Canadians will continue to hold onto their analog phones for as long as the coverage of digital networks remains inferior. Leading Canadian wireless operator Bell Mobility reports that its CDMA network covers over 90% of the population, and by the end of 2002, its digital coverage will match its analog service.
Despite the fragmented mobile technology standards, the sector has grown strongly over the last two years, with subscribers numbering over 11.2 million as of July 2002, according to the Canadian Wireless Telecommunications Association (CWTA). eMarketer estimates that by the end of 2002, there will be approximately 12 million mobile phone subscribers in the country, which will rise steadily to 16.5 million by 2004.
With a cheap, stable and widespread fixed-line phone system, in combination with a patchwork of wireless technological standards, there have been few incentives, until recently, for Canadians to adopt mobile phones. Now that digital coverage has become more widespread and advanced mobile internet services are available, Canadians are finding a reason to go mobile.
For complete coverage of the mobile voice and data sectors in Canada and the United States, see eMarketer�s North American Wireless Report, 2002, coming out next week
Ben Macklin is a Senior Analyst with eMarketer. You can reach him at email@example.com with comments, questions or suggestions. .
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