Firms see little trade impact but face economic pressures
Canadian telecommunications companies do not anticipate significant disruption from the ongoing US-Canada trade dispute, but other economic pressures could challenge customer growth in the near term, according to a Desjardins report cited by BNN Bloomberg.
The report followed a telecom industry conference hosted by Desjardins in Montreal on March 17-18, where executives from BCE Inc., Telus Corp., Quebecor Inc., and Cogeco Communications Inc. shared insights on market conditions.
While companies acknowledged global economic uncertainty, they indicated minimal exposure to tariffs.
“Management comments supported our view that the sector is relatively shielded from the increased macro risks we are currently seeing,” Desjardins analyst Jerome Dubreuil wrote in a note to clients. However, he also pointed out that several industry-wide challenges persist.
Telus chief financial officer Doug French discussed the company’s internal approach to managing potential tariff impacts. He said Telus monitors foreign exchange volatility and ensures its supply chain remains diversified to address cost increases and potential shortages.
Beyond trade concerns, telecom executives expressed caution about customer growth, citing shifting immigration policies as a potential factor.
In late 2023, the federal government revised its immigration targets, lowering the number of permanent residents expected in 2025 to 395,000 and in 2026 to 380,000, down from a previous target of 500,000.
The government has also placed limits on international student visas for 2024 and 2025.
At a separate Scotiabank conference, Bell CEO Mirko Bibic linked these policy changes to expected declines in subscriber growth. He noted that Bell began seeing the effects in the second half of 2024 and said the company remains focused on maintaining its market share among new arrivals to Canada.
Dubreuil suggested that subscriber growth for at least one of Canada’s major carriers could remain flat or even decline in the latest quarter. He pointed to increased promotional offers as a sign that companies are working to attract new customers before the quarter ends. However, he suggested that telecom providers should prioritize long-term revenue growth over short-term promotional strategies.
According to BNN Bloomberg, Dubreuil also noted that telecom companies may consider selling assets in 2024 to manage debt, as the industry faces slow growth, high dividend payouts, and costly spectrum payments.
