The Canadian Telecom Industry in Trouble

The Canadian Telecom Industry in Trouble

It is one month into the new year and, perhaps, some resolutions are coming true. However, this cannot be said for general economic conditions around the world. All over the globe, countries are feeling market pressures, and that is especially true in the United States.

For instance, the price of crude oil has reached lows not seen in over a decade. In addition, whatever gains the financial markets made last year were totally eradicated last month, as markets plummeted well over five percent.

This economic slowdown is also being felt by Canada, our neighbor to the north. The telecom industry there has been badly hit by this slowdown. According to a recent article, this market segment has experienced a growth rate of only .5% in 2015. It is expected that this trend will continue into 2016, with a very modest growth rate of just 1.4% (at least it is higher than it was in 2015).

There are other specific factors cited for this slowdown. These include:

  • A much higher than expected debt level.
  • Higher levels of unemployment. Because of this, customers have much less spending power, thus having things like a TV connection or having a sophisticated means of communication, such as VoIP are less likely.

The Canadian pay television industry has almost collapsed, as well. According to a Senior economist, Kristelle Audet, “This, combined with sharp telecom price increases were seen in the past couple of years, will likely prompt Canadians to review their telecom services and eliminate unnecessary options along the way.

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Valerie Stephen
valeriestephen@geo-tel.com