Canada's Telecoms Industry Expecting Record Profits in 2007

After posting record profits last year, Canada's telecommunications industry is expected to see profit levels increase again to $4.3 billion in 2007, according to the Conference Board's Canadian Industrial Outlook: Canada's Telecommunications Industry - Spring 2007. "Despite modest sales growth and minimal price increases, industry profits reached a record high in 2006 thanks to weak growth in material and capital costs," said Michael Burt, Senior Economist.

"However, weak price appreciation and a shrinking market for traditional wired services will limit industry profit growth to an average of just 4.4 per cent annually between 2007 and 2011."

Service carriers have been forced to adapt quickly to ongoing regulatory and technological changes in the industry, including the increased availability of Voice over Internet Protocol (VoIP) services. The number of traditional fixed wire lines has steadily declined since its peak in 2001. The number of cable telephony subscribers has surged over the past 18 months.

In conclusion, the recent proposed regulatory changes related to local voice services could further limit price appreciation over the forecast horizon."

Posted to the site on 27th April 2007