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Canadian Broadband Growth Ranks 29th Out Of 30 OECD Countries

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Tuesday April 24, 2007
The OECD this week released its annual broadband statistics for the 30 OECD countries.  The release notes that Canada ranks at the top of the G7 countries in terms of broadband penetration.  A closer examination of the data, however, reveals that that good news masks far more disturbing trends.  As recently as 2003, Canada ranked second in the OECD in broadband penetration.  In 2004, it slipped to fifth and last year it dropped to eighth.  This year, Canada dropped another spot to ninth and it is safe bet that it will drop out of the top 10 by next year.

Not only is Canada dropping in comparison to other OECD countries, but Canada's growth rate ranks second worst among all OECD countries.  The OECD chart lists the countries alphabetically, but it is much more revealing to examine both overall rank and growth rates.
Broadband Subscribers per 100 Inhabitants
  1. Denmark - 31.9
  2. Netherlands - 31.8
  3. Iceland - 29.7
  4. South Korea - 29.1
  5. Switzerland - 28.5
  6. Norway - 27.5
  7. Finland - 27.2
  8. Sweden - 26.0
  9. Canada - 23.8
  10. Belgium - 22.5
  11. UK - 21.6
  12. Luxembourg - 20.4
  13. France - 20.3
  14. Japan - 20.2
  15. United States - 19.6
  16. Australia - 19.2
  17. Austria - 17.3
  18. Germany - 17.1
  19. Spain - 15.3
  20. Italy - 14.8
  21. New Zealand - 14.0
  22. Portugal - 13.8
  23. Ireland - 12.5
  24. Hungary - 11.9
  25. Czech Republic - 10.6
  26. Poland - 6.9
  27. Slovak Republic - 5.7
  28. Greece - 4.6
  29. Turkey - 3.8
  30. Mexico - 3.5
Now consider the relative growth rates from 2005 to 2006:
  1. Greece - 228%
  2. Poland - 187%
  3. Slovak Republic - 128%
  4. Hungary - 89%
  5. Ireland - 87%
  6. Turkey - 81%
  7. New Zealand - 73%
  8. Czech Republic - 66%
  9. Mexico - 59%
  10. Australia - 39%
  11. Luxembourg - 37%
  12. France - 34%
  13. Spain - 33%
  14. Germany - 32%
  15. UK - 32%
  16. Sweden - 29%
  17. Denmark - 28%
  18. Norway - 26%
  19. Netherlands - 26%
  20. Italy - 25%
  21. Belgium - 22%
  22. Finland - 21%
  23. Austria - 21%
  24. United States - 20%
  25. Portugal - 20%
  26. Switzerland - 18%
  27. Japan - 15%
  28. South Korea - 15%
  29. Canada - 13%
  30. Iceland - 13%
Needless to say, this is a pretty abysmal showing.  Far from being an Internet leader, Canada is rapidly becoming a second tier country in terms of broadband penetration with limited broadband competition, hundreds of thousands of people with no hope of any broadband access, rising prices, and more examples of the violation of net neutrality principles than any other country in the world.  Industry Minister Maxime Bernier is fond of pointing to an OECD study on the cost of regulation, yet it is this OECD report that should really command his attention.
Comments (17)add comment

Darryl Moore said:

wolf, wolf
Whoa Michael. I think you may be calling wolf on this one.

Did you also notice that the top ten growth rate countries were also the countries with the least penetration to date, and that the countries with the lowest growth rate (including Canada) had the highest penetration to date?

Coincidence??? I think not!

The simple answer is that our broadband market is approaching saturation. As is Iceland and South Korea. The high growth rate countries on the other hand have barely begun. Most of them in fact being poorer countries who needed to wait for the maturation of the associated technology markets before they were in a position to drastically increase their broadband penetration.

In short. The countries at the top if the growth list are now playing catch up with our mature market.

Nothing to see here folks, move along.

April 24, 2007

Joe said:

...
@ Darryl
Saturation? Give me a break. Look at Denmark or the Netherlands, even though they rank 1st and 2nd on the subscriber list, their growth rates are both double or more than that or Canada's. While the trend is that the greater towards saturation, the lower the growth rate, I really doubt that we should be going at a rate of half that of the FIRST and SECOND place countries. Hell, even South Korea, which you brought up is higher than Canada. Note how ONLY Iceland is placed lower, and that's due to the alphabetical order I assume, and they are placed higher in terms of penetration, so if anything THEY may have a claim over saturation.
April 25, 2007

Colin said:

...
There may be something to the saturation argument. It is much easier to roll out broadband in high population density areas. As Canadian rural towns are far more dispersed than other parts of the world, it makes sense that as the cost is higher, the saturation point is lower. Of course, that we also have lousy, cartel-like communication companies that keep high prices on terrible service doesn't help much either.
April 25, 2007

BunBun said:

Bunny
"Needless to say, this is pretty abysmal showing"? I don't agree at all. You're in the top third in a list of 30 developed countries, and that's not bad at all. Sure, things could be better, but they always could be; saying "we need to roll up our sleeves and work on improving our ranking" is fine, but "pretty abysmal"? Not in the slightest.
April 25, 2007

RJ said:

...
I think I have to agree with the other commentors for the most part, but I also have to agree with some of Michael's fears. But even still, a lot of the Canadian population is pretty spread out in the rural areas where it is harder to serve effective broadband, so I'm not surprised that the growth seems to have peaked for the moment.

It seems to me to be a combination of both sides that's causing this, however while I agree that limited rural spread and rising prices will keep people from signing up, I doubt that the average consumer cares or knows about the net neutrality or competition issues.
April 25, 2007

Joe said:

...
@Colin
It may be true that as a result of the higher costs of rolling out broadband to the more dispersed rural areas reduces the overall saturation point. But this means this saturation point is not actually limited by what the population's needs, but is instead limited by that of the internet providers. That is not exactly good for judging the broadband penetration. Would you say that a broadband penetration of 1% is acceptable if the ISPs said that the costs were too high to roll out the broadband to the remaining areas? (I know its a bit of an exaggeration)
April 25, 2007

Chris S said:

Note \"Per Inhabitant\"
It would also be interesting to note if the "per inhabitant" portion throws this off. In Canada the market for broadband would be a "household", but only one person would typically be the "subscriber".

Comparing Canada and the U.S., and perhaps the U.K. -- all with similar family and social structures. But South Korea, or even Greece, might have sufficiently different norms to change the average "inhabitants per household", which would radically swing the penetration numbers.

Comparing "broadband-served inhabitants per 100 inhabitants" would be the number we're really after here. We might get close by factoring the above numbers according to "average household size" -- I'm still looking for an open source for that list.

April 25, 2007

WJM said:

...
Darryl's right. Plotting growth vs. penetration there's defintely an inverse relationship. It's loose, but it's there. The R2 value for the plot is a nudge under 0.5.
April 25, 2007

a guest said:

Joe Rancourt
While the study does point out some interesting and useful information, actual broadband connectivity is becoming less important than the actual speed capacities of those connections. As it stands, Canada was once a leader in terms of the speeds available to the consumer, but weve greatly slowed our rollout of faster systems҅of maybe it is an issue of other countries adopting a more competitive approach in this area. Due to Canadas immense geography, there exist obvious obstacles. However, if Canada is going to be a leader in using the web to deliever media rich content, we also need to offer the systems that will allow the content to flow into the household. Canadian consumers definitely will be in need of bigger pipes.
April 25, 2007

a guest said:

...
what about Videotron's 100Mbps service?
April 25, 2007

Colin said:

...
Joe,

I think the basic infrastructure costs are significant for the saturation point. But, as I hope was obvious from the last sentence in my initial comment, the severe lack of real competition in the market will not drive down the prices. While we cannot expect the same saturation as high density countries, like the European and Asian countries, we still could expect better if there were a more capitalist approach to our communications market. There really is no reason that we shouldn't have dirt cheap high speed internet in the large cities (I mean, not that fancy store-bought dirt. That stuff's loaded with nutrients.)
April 26, 2007

EARL VEALE said:

...
I was wondering what defines "Broadband" in this survey. I have read the FCC defines broadband as 200Kbps, whereas other countries use a different definition (higher).

Do you know if these stats are all based on the same bitrate.
April 26, 2007

Phil said:

...
There are three kinds of lies: lies, damned lies, and statistics.

I would like to see pop density plotted as well.
April 26, 2007

Joe said:

...
@Colin
I would have to agree with you on that. I wish for the day we can finally start having fibre to the home being rolled out like down in parts of the states, but i really don't have much hope for it with the lack of competition right now. I know some new condos and communities have shared fibre access right now, but that's a very limited number from what I can find.

@Earl
I believe the general classification for broadband is usually 256kbps or higher, which I think was also used for this study (or at least I think it was when I went digging for information).
April 26, 2007

a guest said:

...
It's interesting to look at the technology columns. Canada is first in cable Internet penetration. But on DSL, we're somewhere in the middle of the pack. And, on both fibre/LAN and "other", we're near the bottom.
April 27, 2007

fedge said:

...
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Senior Vice President, Client Experience
April 28, 2007

Canadian said:

This is non sense
Ok everyone why Canada droped so much is because we have a population for 31 million maybe a lil more....So while Canada ranked the top 10 now it wont because most of the people who live in Canada have already bought high speed internet. So there not really much more room left to grow since most of the people already have it.

I know that everyone I know has high speed internet I dont know one person personally who dosent have it! :)
April 28, 2007

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