Shining A Light on the Telecommunications Services Market in Canada

Explore IDC's latest market forecast, challenges and growth opportunities for the Canadian telecommunications market amid the prospect of a market recession.

IDC Research Spotlight

In the latest Canadian Communications Services Forecast, 2022–2026: Telecom Inside Out report, IDC estimated that the Canadian telecom services market (excluding video) will have positive growth and increase by 4.9 percent to C$49.3 billion in 2022. In this interview, we asked IDC Canada's communications research expert, Lawrence Surtees what he thinks is next for the Canadian telecom market, how insulated is this market to weather a potential recession, and what segments are poised for growth.

Q&A with the Expert

Q: The good and the not-so-good news in the Canadian telecom market?

Next Generation Network infrastructure is the future of the C$54 billion communications franchise. Ongoing record-level strategic investments in NGN optical and wireless technologies not only equip service providers to cope with rising traffic demands and future revenue growth, but will enable digital transformation of Canadian enterprises which is critical to Canada's economic development and future prosperity.

The good news in 2022 is that the COVID-19 pandemic will not have as negative an impact on Canadian telecom services revenue. But the Russia-Ukraine War has precipitated rising inflation throughout the world, giving rise to increased recessionary fears.

Q: How insulated is the market to weather a potential recession?

Although the prospect of an economic recession—and its potential magnitude and duration—remains unknown, the communications service sector has historically been recession-proof. Both the COVID pandemic and 2008 downturn show that the increased dependency of consumers and enterprises alike on internet and wireless services mitigates the potential for significant negative revenue growth in this sector. The communications sector remains better insulated than most segments of the economy to weather current economic uncertainties.

Q: What segments in the Canadian telecom market are poised for growth?

The broadband Internet and wireless segments remain telecom's largest markets and sweet spots for revenue growth. The nascent Unified Communications and Collaboration segment is forecast to have the highest year-over-year growth in Canadian telecom.

The rollout of 5G wireless networks is expected to generate increased revenue growth over the next five years further solidifying the preeminent role of wireless. Providers also hope that new use cases for advanced 5G wireless broadband applications will generate needed revenue growth in the flat enterprise customer segment.

Emerging global Low Earth Orbit satellite constellations are key to making broadband wireless access ubiquitous and Canada has a leading entrant in the LEO satellite market.