Canada’s incumbent telecommunications service providers continue to dominate the local and business telephony markets, confirms the third of five CRTC annual reports on the state of tele-communications services competition. The vast majority of the $32-billion industry is being funnelled back to the incumbents that have seen impressive gains in data, high-speed Internet, and wireless. Despite years of hype from the incumbents that greater competition was coming, the commission report demonstrates that it has yet to arrive. The number of local residential and business lines acquired by competitors from 2001 to 2002, 184,000 and 602,000 respectively, is a prime example of the lack of competition in the market. Released last month, The Status of Competition in Canadian Telecommunications Markets shows that among ILECs, smaller players fared better financially than their bigger brothers. A comparison of total telecom revenues shows small incumbents have seen their revenues grow steadily each year from 1998 until 2002 (see table). Large ILECs, which had seen a jump in revenues, experienced a decline of nearly $870 million over the same period. Competitors, while still posting a fraction of what the incumbents brought in, generally saw revenues grow. The exception to the rule was the facilities-based carriers, whose revenue streams mirror those of the large ILECs by rising for four years and then dropping by almost $80 million in 2002. Resellers, cablecos and utels all reported sizable growth in revenues. But for all the brave talk by the competition, the incumbents still dominate. ILEC revenues make up 75% of the total telecom market, while all varieties of competitors account for just under 25%. The figures are even starker in terms of local market share lines. Nationally, ILEC market share, including out-of-territory activity, dropped from 96.1% in 2001 to 95.2% last year. Provincially, the numbers are just as firm. Telus Communications Inc. holds 96% of the British Columbia market and 94.2% of the market in Alberta. SaskTel is in control of 100% of its market while Manitoba Telecom Services Inc. is at 98.1%. Bell Canada’s weakest market is Ontario, where it holds 93.3% of the province’s telecom subscribers. It is healthier in Quebec, where it retains 96.7% of the market. Aliant Inc. is firmly in control of the telecom services market in the Atlantic provinces. It holds 99.8% of the New Brunswick, 97.2% of the Newfoundland and Labrador, and 95.7% of the Prince Edward Island markets. Even in Nova Scotia, where EastLink Cable Systems is carrying on a spirited fight for local residential telephone customers, Aliant holds 92% of the marketplace. An examination of the state of competition in 21 major centres also shows the incumbents are strong. Toronto features the greatest amount of competition, where incumbents hold a mere 89.7% of the market. A further 0.9% is served by out-of-territory ILECs with competitors staking a claim to 9.4% of the market. At the other end of the scale, three cities-Regina, Saskatoon and Fredericton-have 100% of the market under ILEC control. The ILECs continue to loom over local residential service like a leviathan. Revenues for both incumbents and competitors grew each year, but the ILECs dwarfed their rivals. In 2002, the incumbents brought in $5.082 billion in residential revenue, leaving only $58 million for the CLECs. While the ILECs lost just under 1% of their local lines from 2001 to 2002, they still were in control of 12.7 million of the 12.9 residential lines across the country. The figures are slightly more reassuring when looking at the local business segment. In both revenues and lines, the incumbents experienced growth from 1998 until 2001 before falling last year. (ILEC revenues dipped by $38 million between 1998 and 1999 before growing in 2000.) Competitors saw revenues and lines increase every year since 1998. Last year incumbents brought in $3.2 billion of the $3.5 billion of local business revenues, leaving a mere $286 million for all competitors. ILECs held 6.4-million of the seven million business lines. Things were rosy in the broadband sector, with revenues and subscriptions both growing. For the first time, high-speed Internet subscriptions overtook dial-up services in deployment. The commission attributed this to the popularity of Internet Lite offerings from telcos and cablecos. "Internet revenues reached $3.3 billion in 2002, an increase of 24% relative to the previous year, making it one of the fastest growing segments of the Canadian tele-communications services industry," the CRTC says. "Retail Internet access services, which reached $2.5 billion in 2002 (77% of all Internet service revenues), grew at a rate of 27% relative to 2001 and an annual average rate of 40% over the last three years." The study shows that payphones continue their slide into becoming an anachronism. The number of incumbent payphones in 2002 was 157,000, a decrease of 3.7% from the year before. Average annual revenue per payphone fell by 19%, down to $1,800. At the end of the report, the CRTC appends a summary of rulings affecting telecom competition. Included in the list are landmark rulings such as the Ledcor decision (Decision 2001-23), the price cap decision (Telecom Decision 2002-34) and the bundling rules (Telecom Decision 2002-76). The regulator also included the hydro pole access ruling (Telecom Decision 99-13) despite the fact that it was later overturned by the Supreme Court of Canada (NL, May 20/03).