A new report says Canada's immigration influx is spurring subscriber growth for the country's four biggest telecom providers, but significant investments in network infrastructure are needed to meet increased demand for services.A person uses a cellphone in Ottawa on Monday, July 18, 2022. THE CANADIAN PRESS/Sean Kilpatrick
A new report says Canada’s immigration influx is spurring subscriber growth for the country’s four biggest telecom providers, but significant investments in network infrastructure are needed to meet increased demand for services.
Credit-rating agency Morningstar DBRS says Canada’s “ambitious” plan to welcome around 500,000 immigrants per year until 2026 will continue to bring new customers for the major carriers in the near term, but subscriber growth could be challenged beyond that if immigration and economic growth slow.
Report author Vikas Munjal, vice-president of diversified industries for the agency, notes a slower immigration flow “could considerably intensify competition” or raise the costs incurred by carriers to acquire or retain new subscribers.
Ottawa said last fall it plans to level out the number of new permanent residents to Canada in 2026 amid a crunch on housing and other services after surpassing records for the total admitted per year in both 2021 and 2022.
The report also says growth in mobile internet users and a shift to hybrid work models are leading to increased demand for data and bandwidth, highlighting the need for telecom providers to maintain “significant” spending in technology and fibre network infrastructure.
That warning comes as one major carrier, BCE Inc., has announced plans to scale back fibre network investments by $1.1 billion by 2025 in response to the regulatory environment. Rogers Communications Inc. and Telus Corp. say they are awaiting a key CRTC decision before determining any changes to their spending plans.
This report by The Canadian Press was first published Feb. 22, 2024.
Companies in this story: (TSX:BCE, TSX:RCI.B, TSX:T)
