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News | 09/01/2004 4:00 am EDT

Telecom to be growth leader through 2006: BMO
The BMO Financial Group is projecting the real output of telecommunications services to expand at an annual rate of 5.8% during the next three years, which would position the sector as one of the fastest-growing in the Canadian economy. In a recently released report, Prospects for Canada’s Industries: 2004-2006, BMO economists predict that the overall economy will grow by 2.8% this year, then 3.5% in 2005 and then a "sustainable pace" of 3.3% in 2006. Communications and information services are expected to outstrip the broader trend, with growth predicted at 3.5% this year, 7.4% in 2005, and 6.6% in 2006. The report notes that wireless telecom will be one of the fastest growing businesses in the sector as there is continued room to grow subscriber bases and as data services bring in new revenue streams. The report also sees improved profitability for high-speed Internet providers as capital expenditure requirements fall. The shift to high-speed Internet access is also seen as good news for cable television companies as revenues from those services offset subscriber losses to DTH satellite televison providers. Those losses, says the BMO, are expected to slow.

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