Telecommunications

Inside a group dominated by national carriers there is a real small-operator business: the regional provider that builds its own fibre or fixed-wireless network in places the majors have not reached. The counts show it — 1,034 of Canada's 1,777 carrier establishments employ fewer than ten people, against 38 that employ 500 or more [A]. The demand is not in question; connectivity is the one utility households will not give up. The cut is what must be sunk before the first bill goes out, and who the entrant is out-building. BCE spent $3,700M of capital in 2025 — 15.1% of revenue — and that was a reduced year, on operating revenue that grew 0.2% [A]. A network business at maturity reinvests about fifteen cents of every revenue dollar simply to stay current, and keeps a 43.6% adjusted EBITDA margin [A] only because the network underneath was paid for over decades. The regional entrant faces the same cost per home passed with none of that base, in territory that was left unbuilt precisely because density would not carry the cost. That is why rural builds lean on public broadband funding — and a subsidised build has the funder's timetable, coverage obligations and reporting attached. The exposure that does not go away: once the entrant proves a territory pays, the incumbent can overbuild it out of a capital budget larger than the entrant's enterprise value, or a low-earth-orbit service can take the most remote customers with no build at all. Resale over someone else's network is a different proposition and is screened at 5179; billing and operations software for carriers is screened separately at 517.

Nobody with ordinary resources launches satellites, and the pre-screen cut this group on capital. But the definition also covers firms distributing the services of other satellite operators, and that is what most of the group is: 79 Canadian establishments, 55 of them with fewer than ten people [A] — integrators putting terminals on mine sites, vessels, northern communities and backup links for enterprise networks. That business needs a van and a dealer agreement, not a constellation. The cut is that the thing being resold is losing its price, and the new supplier does not need a reseller. Telesat, Canada's operator, reported 2025 revenue of $418M, down 27%, and adjusted EBITDA of $213M, down 45% [A], as demand for geostationary capacity fell away. Its answer is to become a low-earth-orbit operator itself: $708M of capital expenditure in 2025 and a further $1.0–1.2B planned for 2026 on Lightspeed [A] — a 2026 commitment of more than twice the $418M the whole company earned in 2025. The reseller sits beneath that fight. Its historic margin came from the scarcity of capacity and the difficulty of installing and pointing a terminal; low-earth-orbit services ship a self-installing terminal and sell to the end customer directly at a published price. What is left is integration labour — mounting, networking, managed service for an industrial site — a small field-services business whose supplier is also its competitor, not a telecommunications margin. Billing and operations software for this sector is screened separately at 517.

The pre-screen called this a genuine small-operator entry, and on the counts it is the most populated corner of telecom: 3,019 establishments, 2,554 of them with fewer than ten employees and none above 499 [A]. A reseller needs no network — it buys regulated wholesale access from the telephone or cable company, puts its own brand and support on top, and sells home internet or business voice. The screen tested that and the pre-screen does not survive. The reseller's largest cost is a tariff paid to the company it competes with at retail, and the record of the last five years is what happens under that arrangement. Reporting of the CRTC's 2025 market report puts independent wholesale-based providers' share of home internet at 8.4% in 2020, 8.0% in 2021, 6.1% in 2022, 5.0% in 2023 and 4.2% in 2024 — halved in four years [B]. Over the same period the larger independents stopped being independent: Bell bought EBOX and Distributel in 2022, and Quebecor, Videotron's parent, bought VMedia the same year [B]. The incumbent can discount its own flanker brand below the wholesale rate plus the reseller's costs, contest every rate decision for years, and then buy whoever is left; the reseller can do none of those things back. Hosted business voice is the same shape with a different supplier — the platform behind a white-label VoIP service also sells direct. An incumbent that sets your input price, competes for your customer and is the natural buyer of your business is not vulnerable. The 'all other telecommunications' tail of this group was not examined. Billing software for the sector is screened separately at 517.