Counterpoint Research is attending the 22nd Annual Canadian Telecom Summit from 6th to 8th November 2023
Our Research Analyst, Emily Herbert will be attending the 22nd Annual Canadian Telecom Summit at The International Centre, Toronto, Canada. You can schedule a meeting with her to discuss the latest trends in the technology, media and telecommunication sector and understand how our leading research and services can help your business.
When: 6th to 8th November 2023
Where: The International Centre, Toronto, Canada
About the Annual Canadian Telecom Summit:
The Canadian Telecom Summit is Canada’s leading ICT event, attracting the most influential people who shape the future direction of communications and information technology in Canada. For 3 full days, The Canadian Telecom Summit delivers thought-provoking presentations from the thought leaders of the industry.
The theme for the 2023 Canadian Telecom Summit is: Breaking Barriers – Collaboration for Accelerated Digital Innovation Across Telecom, Enterprise, and Society.
Click here (or send us an email at email@example.com) to schedule a meeting with her.
Over the past few weeks, tech giants Meta and Google announced that they will no longer be publishing Canadian news on their platforms within Canada following the passage of Bill C-18, or the Online News Act, due to concerns over financial liability imposed on them by the Act. The new law requires large news aggregators operating in the country to pay for the news links they post on their platforms. Meta has already informed news outlets, including The Globe and Mail and The Canadian Press, that their contracts will end at the end of July and that Meta will no longer post the news outlets’ content.
What is Bill C-18 and what is the goal it intends to reach?
Section 4 of the Online News Act states the purpose of the bill is:
“…to regulate digital news intermediaries with a view to enhancing fairness in the Canadian digital news marketplace and contributing to its sustainability, including the sustainability of news businesses in Canada, in both the non-profit and for-profits sectors, including independent local ones.”
In layman’s terms, the government wants to increase the visibility of smaller local news outlets to expand the portfolio of news sources and to avoid the dominance of the few large news publishers who have contracts with large media aggregators like Meta and Alphabet (Facebook and Google). The way this legislation intends to reach its goal is by imposing a ‘link tax’ on these large media aggregators, which means they will have to pay for the news links that they post on their platforms. These media platforms will be expected to keep a roster of the ‘eligible journalists’ that are posted on the platform to ensure there is transparency on the news outlets and to ensure there is enough representation from underrepresented groups. These regulations aim to hold the media platforms accountable to ensure they are giving more news sources an equal opportunity to be promoted on these large platforms.
Tech giants’ concerns with Bill C-18
Despite the goal of equal news source opportunity, these tech giants are choosing to block Canadian headlines rather than comply. Google announced concerns that led it to pull from the Canadian media market:
Subsidizing and promoting ‘Bad Actors’ and strict media control from the government
Google explained in their statement that the definition provided for ‘eligible news businesses’ is very broad with low standards for journalistic integrity, which could risk the spread of propaganda and fake news. This gives rise to the issue of Google having to pay these outlets and provide them with profit and a platform to peddle poor information. This is currently prevented through qualifying criteria for journalism tax credits to be considered in Canada.
As Google pays proportionally for these headings, the act also stipulates that there is no ‘undue preference’ in the rank of relevant searches that Google currently uses. This means that there is a chance these bad actors could achieve a higher ranking in the searches and therefore reach Canadians a lot easier than with the current Google algorithm, which aims to return the most reliable and relevant sources.
On the flip side, the Canadian Radio-television and Telecommunications Commission (CRTC) will be responsible for qualifying who is considered an ‘eligible journalist’ and will be able to control the content that Canadians have access to. Although this could help control the foreign ‘eligible journalist’ who may peddle propaganda, it will also give more control to the government regarding what news Canadians will have access to that could eventually create a bubble. There is little information about the checks and balances that are in place by the CRTC to moderate these eligible news sources.
Lose-Lose business deal for Google and Meta
The new bill would require Google to pay news outlets for the links they provide, but ultimately the link is driving visitors to the publisher’s website. This means that instead of free marketing of the news article on Google (which is currently happening), the news outlet would get free marketing plus a pay cheque from Google. Aside from the journalistic morale that Google outlined before, from a business perspective, it makes very little sense for Google to participate as they would be paying the client and also providing them with a free service.
Status and the expected implications
This is past being a bluff from these large tech companies; the media industry has seen the power these giants have, as a similar legislation change happened in Spain which caused Google News to shut down for almost seven years, although ultimately it ended up returning after there were changes to the law. The CRTC announced this week that the ministry is drafting regulations that will address the concerns these media platforms have with the legislation. The ultimate fear of these tech giants is that there is an undefined financial liability that they will be responsible for, so the goal of these drafted regulations is to answer exactly how much these tech giants will be expected to pay if they do decide to keep their services in Canada.
Despite the turmoil this has caused in the Canadian Media market, other governments are also aiming to find ways to limit the media control these privatized media platforms have over the spread of news within a country. US states are exploring similar ways to enforce more competition in the news. Meta and Alphabet’s revenues would take a harder hit if the two companies follow the same course of action in the US as well.
Weekly Newsletter July 13, 2023 Why Are Foldables So Hot In China?
Google announced the launch of the Pixel Fold device at the Google I/O developer conference on May 10. The device features a 5.8” display when closed and a 7.6” OLED display, powered by the Google Tensor G2 chip, when opened. Google is calling the device the ‘multi-tasking master’. As the I/O developer conference left viewers with an excited buzz about a second viable player in the foldable smartphone space, Canadians were once again left in the cold. The device will be launched in the US, UK, Germany and Japan, with no indication yet of further expansion, though there are rumors of the device reaching other markets later in the year. Sounds familiar? In 2019, Samsung launched its first foldable device, the Galaxy Fold, and yes, Canada was not on the list of lucky markets to receive the device.
Although it feels like Canada is once again put on the sidelines of the tech innovation fun, it is the OEMs’ strategic planning that is behind the decision to leave a mature smartphone market like Canada out of the new launch mix. The Canadian smartphone market can be summed up in two words – small and stable. Canada’s population is now 38 million, less than the population of California. This restricts the reach that companies can use to get substantial feedback for a new smartphone in the market. The country does have stable growth due to immigration, students, and work visas that cause a steady flow into the smartphone market, but this demographic is not looking to spend CA$2,000 as soon as they begin to settle in. The UK, whose population is double that of Canada, sold 50% more foldable devices than Canada in Q1 2023.
Along with the issue of a small population, the Canadian market is not a good ground to test a device due to the retail channels and additional costs. Without a few iterations of a device to prove the durability, the trends of foldables in Canada are not as strong as in other regions. With a small population and macroeconomic headwinds weakening the Canadian dollar, the market retails devices at comparatively higher prices. This in turn has resulted in a longer holding period for devices to avoid upgrade costs for a new device. And when a device has a hardware change like a hinge that can evoke doubts over its durability, Canadians are left hesitant on shelling out the cost.
Samsung had already considered these problems in 2019. The Galaxy Z Fold was released in South Korea on September 2019, seven months after the February 2019 announcement. The limited release in Canada started in December 2019, after there was much chaos over the hinge’s durability that already had Canadians clutching their wallets with concern. After Samsung also overcame carrier certifications, marketing costs and other hoops to put a new device in the Canada market, the Galaxy Z 2 series had a smoother launch in September 2020. It was not only launched in Canada but also made available exclusively through Bell.
Along with dealing with the uncertainty over new hardware, Google also needs to partner with Canadian carriers to achieve the greatest reach in the population and make the device affordable through trade-in offers, bundle plan discounts or device-return leasing options that Canadian carriers often push.
Due to its small population, high data costs and closing of ranks between carriers, Canada is not a feasible market for OEMs to launch a ‘test’ device. One perk that Canadians can look forward to is that once these devices do reach the market, often the bugs are worked out and the user experience has already been enhanced due to initial feedback from other countries.
TELUS had an excellent third quarter with YoY growth across all segments. The earnings call focused on the lack of churn in this quarter and the dependability of TELUS’ network, with no direct reference to the Rogers nationwide outage that caused a standstill in the country at the beginning of July. But the mobile gross additions during Q3 2022 were at their highest for TELUS since before the pandemic. Even as TELUS saw great success in its mobile segment, its other segments like IoT, TV and wireline also saw significant growth this quarter.
Information Source: TELUS
TELUS continues to keep churn low; Expands 5G Coverage by 23%
While emphasizing on customer loyalty and lower churn, TELUS highlighted that this was the eighth quarter out of the last 11 where the postpaid churn was below 0.80%. The quarter saw 0.73% churn for the postpaid segment and 0.95% when combined with the prepaid segment.
Mobile phone ARPU increased 2.3% YoY. This was attributed to the adoption of 5G+ plans that customers are upgrading to. The early launch of the iPhone 14 series would also help boost ARPU as carriers are a dominant sales channel for these devices.
Service revenue was up 4.2% YoY. Mobile network revenue was also up 6.8%. Roaming revenues continued to increase to approach pre-pandemic levels as people continued to travel and absorb roaming fees. The upgrade to 5G+ plans also contributed to the increase in mobile network revenue.
5G expansion has been progressing fast for TELUS, with the total 5G population coverage increasing 22.8% to 29.6 million as against LTE’s 37 million.
Information Source: TELUS
Growth in connected devices category slowed down
Connected devices have been a large growing segment for TELUS in the past year, with the sales of smartwatches, tablets and other IoT devices increasing at the carrier. Connected device sales saw an increase of 15.1% from Q3 2021.
Wireline saw 36,000 internet net additions, not as strong as the 46,000 net additions last year. Total internet subscribers saw a YoY increase of 6.3% in Q3 2022.
TV net additions saw large growth at 18,000, up 8,000 from last year to result in a 4.9% increase YoY.
TELUS continues to strengthen its position in Healthcare and Security
Healthcare has been a growing focus for TELUS outside the wireless industry as COVID-19 proved the need for better connectivity within the healthcare system. TELUS has been able to add 1.7 million virtual healthcare members to its Lifeworks network in the past year. It can accommodate up to 60.4 million people.
Security devices and memberships have also seen a spike this year for TELUS, with total subscribers to the service now reaching 950,000, a 22.9% increase YoY. Ecosystem OEMs like Google have developed smart doorbells and house cameras with connectivity to smartphones, which has boosted this segment significantly.
New global metrics show a 19.3% revenue increase for the technology and games segments of TELUS. With cloud and mobile gaming gaining popularity, these metrics will invite an increased focus from carriers.
Overall, TELUS has had great success this year, not only boosting its wireless market but also quickly expanding its other businesses in sectors like healthcare and security. Apple iPhone 14 series significantly contributing the the late Q3 success of device sales, as per Counterpoints North America Channel Share Tracker. TELUS is on track to meet the 2022 guidance it had set at the end of last year. TELUS has already reached the goal of 10% growth in adjusted EBITDA and 9.9% growth in operating revenues YoY. The consolidated targets are attainable in Q4 as strong sales of flagship devices continue to drive the market and roaming fees continue to climb with travel becoming easier the world over with the gradual lifting of COVID-19 curbs.
Rogers reported an excellent quarter across all segments (wireless, cable, and media) with increased revenue, upgrades and subscribers and a declining churn rate YoY. Although the metrics are mostly positive, the tone of the call was gloomy as it addressed the nationwide network outage that occurred on July 8th. They also addressed the Rogers-Shaw merger and why they pushed the rollout date to the end of 2022. There are also the looming inflationary pressures on consumer spending that will impact the national economy in the second half of the year.
Positive results across all segments
Service revenue increased 11% YoY and mobile ARPU had a 6% increase YoY as people are returning to work and travelling. Although equipment revenue was down YoY by 6%, overall revenue was up 7% due to the significant increase to the service revenue.
The boost in service revenue is driven by roaming fee revenue that has now increased as travel and immigration begins to settle back to pre-pandemic levels. Return to work has caused a 40% increase in data usage and this is expected to grow in the second half of the year as students return to school in September and immigration continues to pick up.
Rogers has been working to improve their cable sector and they saw the largest quarter for cable that they ever have with 21K net additions to video and 26K additions to retail internet. Rogers has now reached 4.7M homes passed for their cable segment.
The Media segment saw the biggest growth this quarter with media adjusted EBITDA reaching $2M CAD. This is a 103% increase YoY and is a result of the Rogers Centre being able to reach full capacity and the supported teams, like the Blue Jays, being able to have a full season with home games.
The impact and next steps to recover after the network outages
According to statements during the call, Rogers has seen an immediate impact on subscriber base in the early days following the outage, caused by a coding error, but churn has seemed to improve daily. Rogers has promised $150M worth of credits that will be automatically applied to customers monthly bills in Q3 to reconcile the loss of network connection these customers experienced. The CAPEX for 2022 has increased from $2.8B CAD to $3.0B CAD to cover the losses and implement preventative measures. Going forward, Rogers has created a plan to instill safeguard to prevent this level of outage again and the plan is as follows:
Rogers uses a common IP core gateway to capitalize on efficiency, the outage highlighted issues with this method so there will be a physical separation of wireless and cable router gateways. This plan will cost $250M over the course of several years. Rogers believes that the Shaw merger will further help reduce the cost and timeline of this project.
Greater partitioning of the network at a more local basis, so if there is an outage in one area that nowhere else besides that area should be impacted.
The internal process in writing, moderating, and executing code will be re-evaluated and updated to help prevent errors like this from occurring.
Failsafe measure for emergency calls, partnering with other carrier to provide a 100% working method to transfer those emergency calls to another network in case of those issues and that will happen within the 60 days mandated by the minister to telecommunication.
Rogers-Shaw merger updates
The expected date of the merger has now been pushed to the end of 2022 from the optimistic goal of the end of Q2 2022. The outage was not the only factor to impact this date change, the competition bureau had appealed the merger due to the lack of evidence that this acquisition of Shaw will have a positive impact on the state of competition in the Canadian wireless market. Rogers focused on Quebecor being the new 4th player in Canada market as they are the ones who are set to purchase Freedom mobile from Shaw once the merger has been finalized. The deal is expected to cost Quebecor $2.85B CAD for Freedom mobile, this purchase will be the launching point for Quebecor to launch their network outside of Quebec and into the western provinces.
Expected inflation impacts
Rogers is optimistic about its outlook for the second half of 2022 despite the inflationary pressures that will be impacting the economy and the possibility of a recession. Historically, enterprises usually see the highest impacts from recession and Rogers has claimed that since they are focused on consumers, negativity will be limited. Rogers has managed to grow their revenue and subscriber base to a point that they will be able to withstand hiccups to consumer spending in the second portion of this year and they will maintain the guidance provided at the end of 2021 for 2022. Rogers remains the top carrier in Canada, as Rogers website and stores covered over 23% of the smartphone sell-through in Q2 as per Counterpoints Canada channel share tracker.
With Canada’s 3500 MHz auction ending, the focus has shifted to the setting up of 5G networks by license winners as well as the competitive landscape of the country’s wireless market. The auction, which started on June 15, saw participation from 23 Canadian companies, which together made 108 bids over 25 days. This was the highest-grossing spectrum auction in Canada’s history, closing with $7.06 billion (USD) spent. The country’s ‘Big 3’ telecommunication network companies – Rogers, TELUS and Bell – cornered most of the available spectrum with 738 licenses costing $5.80 billion.
Comparison with US auction
The highest-grossing Canadian auction was not unique and was only following the trend visible in the neighboring US. Earlier this year, the US 5G C-band auction brought in over $81.11 billion for licenses and an additional $13 billion for incentive costs. With a grand total of $94 billion, this was the most expensive mid-band auction worldwide. Again, as in Canada, the US’ biggest post-paid channels were the three largest bidders in this auction. Verizon, AT&T and T-Mobile collectively spent $89 billion for licenses and incentive costs.
The high prices that carriers have been paying for these licenses are imperative to understanding the importance of 5G network in the future of wireless technology. As the newest smartphones are 5G compatible, carriers are under pressure to keep pace with the technology.
Why is 3500 MHz auction important for Canada
5G services in Canada have only been available through the ‘Big 3’ carriers, which leveraged their existing low- and mid-band spectrum assets, primarily used for 4G LTE, to build a 5G network. The network access to regional carriers and MVNOs has also been very restrictive. The latest 3,500 MHz auction will bring the capabilities for a true 5G wireless network to Canada while also providing access to carriers outside of the ‘Big 3’. The auction opens up the possibility of a new national competitor with Videotron owner Quebecor buying over 300 licenses for $657 million. Other notable purchases made during the auction were from Cogeco (spent $234 million) and Xplornet ($193 million).
Impact of Videotron
A consistent issue Canada’s wireless market has experienced is the lack of variety and competition. Regional players are not strong enough to set up a 5G network outside of the heavily populated hubs in provinces like Ontario, Quebec and British Columbia.
Smartphone Penetration in Canada
Canadians pay such high prices for wireless connectivity that there is a demand from consumers to increase competition to lower costs. Videotron owner Quebecor has expressed interest in expanding its network outside Quebec.
Canada needs a 5G network to boost innovation with IoT and keep up with technological advancements that other countries are working on. 5G will increase wireless rural connectivity across Canada as well as build a fixed wireless access (FWA) network to minimize the cost of laying fiber optic cables. US carriers like AT&T and Verizon have made plans to develop smart factories and other projects to gain from their 5G networks. Canada must also quicken its 5G deployment to start working on the technology’s other profitable segments.
The lower house of Canada’s Parliament has passed a Bill called C-10 which gives the Canadian Radio-television and Telecommunications Commission (CRTC) the authority to monitor and regulate online platforms like YouTube and Facebook. The goal is to motivate these giant digital platforms to promote the production and financing of Canadian content. The Bill will be sent to the Senate for review in the fall.
As with any potential law regarding the monitoring of online social platforms, this Bill has been controversial since its early stages. Questions have been raised over whether the Bill infringes on Canadians’ Charter Rights, including freedom of speech. There have already been numerous amendments to the Bill until the minute before the MPs voted on it. One amendment says that individual users and content creators will not be affected by the proposed law.
Any review of the Bill by the Senate will have to be exhaustive and check any infringement of the Charter. But the monitoring of algorithms that are used to recommend content to Canadians will be a hard sell against the backdrop of outrage and pushback coming from citizens.
Various political analysts believe the Bill will die out before it is even taken up by the Senate, as the coming election will overshadow the Bill. Besides, the political climate in Canada already has enough on its plate with COVID-19 and indigenous residential school protests.
However, even as there are prospects of the Bill falling by the wayside, steps have already been taken in the direction of more government control over cross-border digital consumption. July 1st, saw an increase in digital media subscription fees as taxes were imposed on the cost of these services. Platforms like Spotify and Netflix will see a 5-13% increase depending on the tax rate in each province. The move also covers all forms of digital cross-border purchases, including short-term accommodation like Airbnb.
The idea of making Canadian content more accessible and prevalent is a good step to promote production within the country that often must compete with the US. The problem arises when the method to push Canadian content to the top of algorithms, and possibly restrict cross-border content being consumed by the Canadian public, becomes a risky tactic in a country that presents itself on the international stage as a country that promotes freedom of its citizens. Overall, Bill C-10 may have positive motives on the surface, but in practice it may cause more backlash and stifle more freedom than it intends to.
The Canadian Radio-television and Telecommunications Commission (CRTC) announced on April 15 that the country’s ‘Big 3’ telecommunication companies will be mandated to give smaller regional operators access to their networks. These smaller companies would be considered mobile virtual network operators (MVNOs) and buy wholesale access to these networks and resell it. The CRTC aim here is to increase competition in the Canadian telecom market through these MVNOs. However, the criteria laid down for these MVNOs has put a question mark on the success of this plan.
The focus is on distributing networks from the ‘Big 3’ – Bell, Rogers and Telus – but the CRTC has also incorporated regional network provider SaskTel as a dominant network provider in Saskatchewan. The CRTC outlines that the wireless carriers will be able to sell their networks to MVNOs based on the following provincial distribution:
Bell, Rogers and Telus in all areas except Saskatchewan and the territories
SaskTel in Saskatchewan
Bell Mobility in the three territories of Yukon, NWT and Nunavut
The layout of where these networks can be sold has been made clear, but the CRTC has not outlined any mandated pricing or rates at which the networks can be sold to the MVNOs.
Qualification for MVNOs
The CTRC has laid out some criteria for the prospective MVNOs. The major qualification needed here is that these regional companies must have existing Canadian networks. This complicates the definition of what a true MVNO would be in Canada, as in the normal course an MVNO has no previous infrastructure of its own. With the CRTC granting access to companies which have already contributed to the development of competition in the Canadian market, the eligible regional companies would be:
The announcement of this MVNO mandate has come days after the deadline for the bid to participate in the 3500MHz spectrum auction in mid-June.
The CRTC will play an active role in mandating the wholesale MVNO access service for seven years to encourage individual MVNOs to build their own network. The national carriers must also give the CRTC a breakdown of their plans and updates on the progress to lower-cost and introduction of occasional-use plans every six months.
However, considering that the CRTC intends to improve the level of competition in the Canadian market, the latest move seems to be only a baby step where a giant leap is needed. This mandate states that it will be targeted towards helping MVNOs introduce competition. But if these regional companies already must have their own spectrums, are they really MVNOs? The power is still left to the national carriers to decide the rates at which they will sell these network shares, and it is safe to assume they will not be willing to lose money over this mandate.
The Canadian Radio-television and Telecommunications Commission (CRTC) has announced that it will be awarding $84.4 million in funding to 12 projects to enhance broadband connectivity in underserved rural regions in northern Quebec, Ontario, Saskatchewan and British Columbia. These projects will collectively include laying of around 2,000 km of fiber network cable to benefit 56 communities. The timeline for the projects is yet to be announced but they are expected to be completed by the end of 2021.
The money for these projects will be coming from the CRTC’s designated ‘Broadband Fund’. The CRTC made a call-out for applications to communities and municipalities to outline their need for broadband expansion, including how much funding and materials would be required for the project. More than 600 applications were received from across the country, resulting in a total request of $1.5 billion. The CRTC continues to evaluate and announce new projects once they have been approved.
In the current global climate, access to internet outside of urban hubs is important for those under a stay-at-home order due to COVID-19. Besides, these expansions will help rural development and setting up of infrastructure in unoccupied lands. This, in turn, may encourage population dispersion that the Canadian government wants.
Canada has an expansive landmass, which makes implementing broadband internet connectivity an expensive endeavor for the country. Concentration of population has made it easier for network providers like Rogers and Bell to access most of the population without having to expand infrastructure to cover large areas. Under 25% of Canada’s landmass has broadband connectivity but it can reach over 90% of the population, as most of the country’s population can be found concentrated in provinces like Ontario, British Columbia, Quebec and Alberta. Outside of such areas, internet connectivity is extremely limited, necessitating public investments in infrastructure improvement.
When comparing the country’s rural internet access with that in countries like the US, Canada is at a significant disadvantage due to the lack of internet carriers. Canada’s ‘Big 3’ – Rogers, Bell and TELUS – have a strong monopoly over the country’s wireless market. The US has internet carriers like Broadband Q that target rural areas to close the ‘digital divide’ between rural and urban centers. Canada has limited competition between carriers to trigger an expansion of broadband internet to areas considered “unprofitable”. This causes the need for government organizations to provide funding and resources to unite rural and urban centers in the expansion of broadband internet access.
The need for rural development has become a focus for the Broadband Fund, which has so far committed around $156.5 million to improve connectivity in 107 communities.
For more information about the Broadband Fund projects or on the CRTC, visit crtc.gc.ca.
Senior Analyst Hanish Bhatia said, “Smartphone demand rebounded in Q3 2020 driven by pent-up consumer demand and solid uptake of back-to-school promotions. Retail activity picked up as consumers were now more confident about going outdoors. Online sales also remained strong with some consumers opting for store pick-up options. This trend is likely to continue as carriers push for a healthy mix of digital sales and brick-and-mortar sales. The market witnessed strong competition among carriers to gain share, especially among flanker brands. Customer churn remained comparable to 2019.”
Speaking on Canada’s 5G ecosystem, Bhatia said, “5G remained in focus as carriers shifted their marketing efforts to get an early lead among premium early adopters ahead of the Apple launch event. The number of 5G models has gone up from 3 in March 2020 to 14 in November 2020 after the recent Apple launch. As of October 2020, Canada had added more than half a million 5G devices to its networks. Most of the 5G device sales are restricted to the premium price bands, while average 5G device costs continue to decline in the US and other countries with 5G networks.”
Commenting on 5G opportunity, Research Director Jeff Fieldhack said, “Rogers leads the market in terms of 5G deployment, with active networks across 130 metros. With the most extensive network rollout and the largest Apple installed base, Rogers is in a good position for a strong 5G upgrade cycle during the fourth quarter. Bell and Telus also launched 5G network services at the end of Q2 2020 and continue to ramp up across Canada. Carriers are now more than prepared for a strong quarter, but another COVID-19 wave can play a spoiler with diminished consumer purchases. 5G in Canada is still in the early stages of deployment with carriers leveraging the existing spectrum assets for the initial 5G push. The sweet spot for 5G performance and coverage will be the 3.5GHz spectrum, and auctions for this spectrum will not be before June 2021. The carriers could take another year after the auctions to start using this spectrum.”
On OEM performances, Fieldhack added, “Apple remained resilient and maintained its lead over other brands. Supply constraints seen in Q2 2020 eased in Q3 2020. We see less display devices on retail shelves to protect against COVID-19 spread, especially in case of new iPhone 12 series. Samsung did well on a YoY basis driven by demand for the new Note 20 series and Galaxy A51 and A71 devices. The LG Velvet remained in focus for the mid-range 5G value consumers. Motorola registered strong growth on a YoY basis after facing supply issues during the last quarter.”
Commenting on the Canadian market outlook, Research Analyst Maurice Klaehne said, “We can expect a strong upgrade cycle as we enter the promotional period during Q4 2020 – Black Friday followed by Boxing Day. We are already seeing a great response towards the new iPhone devices, especially the iPhone 12 variant. However, COVID-19 has negatively impacted small businesses. Besides, this growth will be slightly offset by less immigration activity and fewer student purchases in Canada during the fourth quarter.”
Apple captured six spots in the top 10 best-selling devices during the quarter. The Apple iPhone 11 continues to be the best-selling smartphone for the fourth consecutive quarter.
Samsung captured the remaining four spots in the top 10 list. The Samsung Galaxy S10 series continues to do well along with the A51 and Galaxy S20 series devices. The new Galaxy S20 FE has also registered strong consumer response which will be of help during the fourth quarter.
LG registered single digit YoY growth with the help of the 5G LG Velvet and other K series models – K61 and K41S – in budget price tiers.
Google has been able to gain some momentum. Pixel 4A promotions were stronger than expected, but the marketing efforts shifted towards the newer Pixel devices such as the Pixel 5. The new Pixel 5 is already available at heavily discounted prices in early Black Friday deals.
Motorola has been able to gain share in budget category devices. The Moto E particularly did well among entry-level devices.
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