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Canada Still Trails Other Counties in Mobile Phone Penetration

Date: 7/28/2008 11:52:10 AM

Canada continues to lag behind other developed nations in mobile phone ownership, according to a new TNS Canadian Facts survey covering 30 countries.

Only 69% of Canadians aged 16 to 60 currently own a cell phone, compared to 90% in the United States and 97% in the United Kingdom.

“Canadians do not have the same attachment to … mobile phones as the rest of the world does,” commented TNS senior vice president, Michael Ennamorato, noting that high quality landline access throughout the country is sufficient for many customers.

Low penetration rates in Canada, however, have prompted a number of companies to aggressively bid for spectrum in the federal government’s latest wireless spectrum auction. A total of $4.25 billion was raised by the sale, which was initially expected to fetch only $1.5 to 2 billion.

But many analysts remain skeptical of such inflated prices for spectrum, noting that most Canadians who do not currently own a cell phone have no plans to buy one within the next 12 months. This group of disinterested consumers, classified as “rejectors” by TNS, includes 23% of those surveyed.

Canadians who do use cell phones, meanwhile, generally tend to choose lower-priced models with less fancy features, and keep the same phone for longer than most consumers (3.5 years on average). Most Canadian cell phone owners are on their third handset, while most users in Hong Kong and Britain are on their sixth.

Mr. Ennamorato explained that wireless carriers standard practice of requiring customers to sign 3-year contracts in exchange for heavily subsidized handsets, may have contributed to these trends.

“There are clearly segments of the Canadian wireless population that are leading-edge, and want the latest and greatest, but on balance there is a certain inertia in this market,” he said.

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