According to credit-rating agency Morningstar DBRS, Canada’s significant immigration surge is driving subscriber growth for the nation’s four largest telecom providers, specifically Rogers, Telus, Bell and Quebecor.
However, the report warns that substantial investments in network infrastructure are necessary to accommodate the rising demand for services.
According to the report, Canada’s “ambitious” immigration strategy, which aims to allow for 500,000 immigrants annually until 2026, is expected to continue attracting new customers for major carriers in the short term.
“Canada’s 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,” said Vikas Munjal, vice-president of diversified industries at Morningstar DBRS, reports The Canadian Press.
However, he cautioned that subscriber growth might face challenges if immigration and economic growth decelerate, potentially intensifying competition among carriers or increasing the costs to acquire or retain subscribers.
The feds announced last fall its plan to stabilize new permanent residents by 2026, following record-breaking immigration levels in 2021 and 2022, which have put intense pressure on housing and other services.
The surge in mobile internet users and the transition to hybrid work models are also contributing to heightened demand for data and bandwidth, which means telecom should be investing in their networks to keep up with demand, says Morningstar DBRS.
But not all telecoms are ready to increase their capital expenditures. Bell said it would reduce its fibre investments by $1.1 billion by 2025, blaming the federal government’s decisions for its clawback. Rogers and Telus have yet to announce any major spending cuts, as they await the CRTC’s decision on mandating wholesale fibre access.
