Telephony fuelling growth for cable TV companies: StatsCan

The cable industry’s expansion into the telephone market is producing dividends in the form of a considerable increase in the number of subscribers, which reached 14.2 million in 2007, according to figures released this week from Statistics Canada.The statistics show that more than half of these new customers were telephone service subscribers. The figure represents the total number of subscribers to principle services such as television, Internet access, and telephone offered by the cable distributers. In essence this means that there are now 1.6 million more subscribers when compared to the same period in 2006. The cable industry has continued to expand the reach of its telephony services. Potential subscribers increased from 8.4 million in 2006 to 10.1 million in 2007. According to StatsCan, this represents 80.3% of homes with cable access.StatsCan attributes the increase in subscription to a diversification of services which kicked off 10 years ago with the advent of Internet access services. Access to Internet services offered through cable has continued to increase among Canadian households and businesses, growing from 4.0 million in 2006 to 4.5 million in 2007, although at a slower pace than in the past.Nevertheless, the traditional niche of television services has experienced modest growth.“As has been the case for several years, there were much fewer new customers for cable distributors in their traditional television services market. Nevertheless, in 2007 they reported the second best results in 10 years, with a net increase of 126,862 subscribers. For the first time since the introduction of digital satellite television in 1997, cable distributors did not lose market share to competitors using wireless technologies,” StatsCan states.Additionally, the number of subscribers to wireless television services, mostly through satellite, grew 1.4% to 2.7 million in 2007. However, the increase in clients to telecommunications services had a major impact on operating revenues for the cable industry, witnessed in a drop in television subscription revenues from 92.1% of total subscription at the start of the decade to 60.6% in 2007.In the competition between cablecos and wireless service providers to attract customers in the past 10 years, StatsCan says cablecos have won the contest, maintaining their market share in 2007 for the first time in a decade. Last year, cable operators earned $1.6 billion (22.2 cents in profit for each dollar revenue), garnering profits of more than 20 cents for each dollar revenue for the fourth straight year, according to StatsCan.As the total number of cable TV customers increases slowly, subscriptions to digital cable TV have been increasing steadily. By Aug. 31, 2007, the number stood at 3.3 million subscribers, or four out of 10 cable subscribers.“If we add digital cable television subscribers to those subscribing to wireless digital television (satellite and wireless cable), close to six out of 10 have chosen digital. This rising popularity of digital technology augurs well for the marketing of new generation services, including high definition television and video-on-demand,” StatsCan states.Digital technology has opened up opportunities for telecommunications carriers to offer television services via telephone lines. By Aug. 31, 2007, these carriers attracted over 166,000 customers, mostly in Western Canada. But StatsCan says “despite the rapid growth in this segment, it still accounts for less than 2.0% of the market share as a whole.”

Telephony fuelling growth for cable TV companies: StatsCan

Broadcast | December 10, 2008

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