Wireless data usage among Canadians is set to explode and become a multi-billion-dollar segment of the existing mobile market in the next three years, according to a report released today by the Canadian Wireless Telecommunications Association.
Text messaging, video calling, music downloading and e-mailing have led to huge growth in the telecommunications industry, CWTA reports, and accounts for about 10% of the average Canadian monthly cellphone plan, or about $1-billion of the wireless market. And that number is expected to rise dramatically.
The industry association, using figures provided by its members, projects the advent of social networking, Web browsing and mobile television to drive wireless data usage to rise to about 30% or $3-billion by 2010.
The CWTA says the figures are an "aggregate number," and did not provide a detailed forecast for the overall wireless market, including voice. IDC Canada says total revenue for Canada's wireless sector was $12.1-billion in 2006.
Peter Rhamey, a telecommunications analyst with BMO Capital Markets, said carriers such as Rogers Wireless, Bell Mobility and Telus Mobility have embraced wireless data.
"First and foremost, it's a new business for them. It's an additive to whatever they're getting in the voice business they're getting today," said Mr. Rhamey. "Secondly, voice average revenue per user is expected to decline."
"If you can sell users a compelling data plan, that might be an existing $20 to $30 extra you get from them a month."
One major beneficiary of the fast wireless data growth in Canada has been Waterloo, Ontario's Research In Motion Ltd. The company known best for its ubiquitous Blackberry device has seen its penetration for smartphone devices in the Canadian market grow to 80%, according to a report from IDC.
RIM co-chief executive officer Jim Balsillie is more than happy to take his share of credit for the growth of wireless data in the country.
"We've really been the one driving this data usage far and away," Mr. Balsillie said in an interview. "We're the main horse in the wireless data space."
One surprising statistic reported by the CWTA states that Canadians have sent almost seven billion text messages so far this year, almost double from last year, which saw 4.3 billion text's being sent.
Mr. Balsillie doesn't think the rise in text messaging among Canadians will hurt RIM's overall business.
"Some people are text messaging but that's a pretty limited, but I wouldn't call it a driver," said Mr. Balsillie. "When you look at wireless data, the evolution is on the application platform stuff which the Blackberry leads on."
Mr. Balsillie adds that while he doesn't foresee carrier data plans lowering their prices, he does anticipate more segmented data plans being offered to consumers to spur higher growth.
Lawrence Surtees, vice-president of communications research for IDC Canada, says the rapid wireless data market segment is one of the main drivers keeping telecom businesses profitable.
Based on IDC Canada's research, the market is experiencing triple-digit year-over-year growth and still has room to grow. But Mr. Surtees advocates for data plans to become easier for the consumer to digest and follow business models already implemented within the United States or parts of Europe.
"The wireless carriers need to work towards a much simpler or all inclusive wireless data packages," said Mr. Surtees. "Like when the iPhone came out in the U.S. and AT&T had this exclusive wireless data plan for $20 a month, we need something like that in Canada for wireless data to reach critical mass."
http://www.canada.com/nationalpost/...a0c1d43&k=99597