Canada’s big three telecommunications carriers are undergoing a severe international roaming revenue crash. This decline coincides with the fact that fewer Canadians are going to the US. Many are pointing to continued trade tension, concern due to tariffs, and just a general lessening of cross-border travel as the main drivers of this decline. Smartphone adoption rates Rogers Communications Inc., Bell Canada, and Telus have all seen huge drops in their average revenue per user. These drops are tied directly to international roaming charges.
That’s in part because Rogers Communications Inc. registered an unusual average revenue per user decline of 15 percent! This drop is largely attributed to a drop in roaming usage from its customers. Bell Canada didn’t just have that option — it followed that trajectory. As a result, in the first quarter of the year its overall international roaming revenue fell by nearly 10 percent. BCE Inc., one of the big three, brings in about four percent of its mobile phone average revenue per user from international roaming. By contrast, Telus has a more comfortable share of just under five percent.
That downward revenue trend is consistent with recent statistics in the dramatic drop-off of Canadian visitors to the U.S. Recent statistics reflect this drop-off, with return trips by air from the U.S. down almost 20 percent YOY. At the same time, the number of Canadians driving home fell by 35 percent in April from the same month a year ago. This constitutes the fourth month in a row of yearly decreases for international road trips.
Tariifs Bell Canada’s chief executive, Mirko Bibic, noted that tariffs to date have had little impact. Chief among them he stressed, is the increasing uncertainty about future travel patterns. “I’m watching it very carefully, and of course like probably most CEOs, quite concerned about it,” he stated. Bibic expressed skepticism about whether Canadians would shift their travel preferences to other destinations like Europe: Are we going to be flying to Europe and other routes, and is that going to be their route of choice? I clearly don’t know the answer to that.
Roaming revenues are another major source of competitive revenues and are fast disappearing. Public perception of U.S.-Canada relations adds oil to the fire, stoked by fury over steel tariffs and President Donald Trump’s calls to annex Canada. As news continues to build about mistreatment at the U.S. border, many Canadians seem to be losing their appetite for crossing the 49th parallel.
Rogers’ CFO Glenn Brandt acknowledged the impact of decreased roaming on revenue but remained optimistic about potential future travel patterns. “I do expect there will be more travel through the summer, but some of that travel is moving out from North America and over to Europe and what have you,” he remarked. He emphasized that March, in particular, was significantly affected by reduced travel: “Clearly economists are predicting potential difficulties. First, we’re keeping a close eye for any indicators of reduced consumer confidence and/or a GDP-like slowdown in enterprise spending.”
Canadian telecommunications companies will continue to have a difficult time in the international roaming sea. That’s going to remain the case until Canada/U.S. relations thaw out a bit. As the unpredictable trade war continues unabated, leaders across every industry are challenged to chart a steady course. Despite this, they continue to be optimistic about a consumer travel comeback.
Rogers CEO Tony Staffieri acknowledged the cautious outlook but noted that the impact has been relatively small thus far. “I would say it’s minor, if anything.”
