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Thursday
Aug252011

Wireless Substitution - Update

About a year ago, we looked at the state of wireless substitution, measured in terms of households that have no wireline telephone service and rely only on wireless service.  Earlier this year, Statistics Canada released some figures on wireline and wireless telephone use in 2010 based on its Residential Telephone Service Survey.  The size of the survey sample (more than 19,000 households) provides a greater degree of reliability, particularly when looking at smaller subsets of the population.  The following update is based on the Statistics Canada summary results released in April 2011, as well as more detailed survey data that is publicly available.*

The percentage of wireless only households in Canada had risen to 13.7% by the end of 2010, representing nearly 1.9 million households.  The incidence of wireless only is highest among households made up of younger adults (aged 18-34) and those who rent.  One-half of younger households were wireless only in 2010, up from 34% in 2008, while renters continued to account for one-third of all wireless only households.  It is also interesting to note that Vancouver and Victoria had the highest incidence of wireless only households in 2010, at 21.7% and 20.5%, respectively.  

An additional 1.8% of households reported having a wireline phone that was used only for business, computer or fax purposes.  This suggests that the number of households that rely on wireless only for residential purposes is more than 15%.

The growth in wireless only households in Canada was accompanied by a continued decline in the number of wireline connections.  As noted previously, local wireline connections peaked in Canada in 2006 at 21 million, based on CRTC statistics. As of 2010, 1 million wireline connections had disappeared, even as the number of households increased. The number of wireless subscriptions outnumbered wireline by 5.8 million.

Source: CRTC, Communications Monitoring Reports

The trend in wireless substitution is even stronger in the United States.  According to data published by the Centers for Disease Control and Prevention, 29.7% of all U.S. households were reported to be wireless only as of the close of 2010, up five percentage points from the previous year.  An additional 15.7% of U.S. households relied on their wireless phones for all or almost all of their calls.  These two groups of households account for more than 45% of all U.S. households. 

Canadian trends in wireless substitution appear to be following the same pattern as in the United States, with a delay of a few years.  

The accelerated shift to wireless that occurred south of the border in 2010 could have been due in part to economic pressures that may not occur to the same degree in Canada.  Even still, U.S. trends suggest Canadian wireless only households could reach 30% by 2014.  

The increasing functionality of wireless devices could drive wireless substitution at a faster pace.  Improvements in mobile networks and the growth in applications on smartphones are key contributors, as noted in our observation last year, and echoed in the CRTC’s second report on Navigating Convergence.

*This analysis is based on Statistics Canada Microdata file the Residential Telephone Service Survey which contains anonymized data collected in the 2010 Residential Telephone Service Survey. All computations on these microdata were prepared by Suzanne Blackwell and the responsibility for the use and interpretation of these data is entirely that of the author.

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