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Canada Q1 2009 - Even More Sluggish Than Usual
Canadian mobile penetration continued to languish below 65% in the first quarter of 2009, with an end-quarter rate of 64.6%. This was up 4.0pp year on year but just 0.4pp in the quarter. As this suggests, Q1 09 saw less than impressive growth, with just 176.6k net additions. This was only the third quarter in the past 10 years to see sub-200k growth. Given that this poor performance comes on the back of the first Q4 since 1990 not to record the peak growth of the year, the Canadian market seems to have been hit harder than most by the global economic downturn.
Market leader Rogers actually managed to improve on its Q1 08 gain of 76k, adding 80k including wholesale connections to take its total customer base to 8.24m. Second-placed Bell saw net additions fall slightly, from 34k to 30k, with an end-quarter total of 6.53m. The only other national operator is TELUS, which managed to outdo Bell for the fifth successive quarter with a quarterly boost of 48k. This took its customer base to within 0.35m of Bell's with a total of 6.18m. However, the 48k gain was well down on the year-earlier figure of 88k, and in fact it was the lowest increase since the second quarter of 2000.
To add to the bad news for TELUS, its ARPU dropped 6.1% quarter-on-quarter to finish on Can$58.39 per month, the first time it has fallen below Can$60 in four years. By contrast, Rogers saw an increase of 0.1% to Can$61.60. Bell, meanwhile, dropped 1.5% to Can$51.52, a decline of Can$0.80 compared to Can$3.49 for TELUS.
As we commented in Issue 160 of The Mobile World Briefing, these ARPUs are unsustainably high, especially given the upcoming launch of Orascom in Canada. With this launch scheduled for Q4 09, it will be interesting to see if any operators make price cuts in Q3 to insure against increased churn.
There is certainly plenty of opportunity for Orascom. With a total Canadian customer base of 21.91m at the end of Q1 09, approximately 12m Canadians do not currently own a mobile. One suspects that Orascom will not take long to make a significant dent in this figure.
Posted to the site on 20th June 2009
This article was extracted from The Mobile World Briefing, the weekly newsletter from The Mobile World.
To download a sample issue of the Briefing in PDF format, please click here.
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