Ray Van Eng (12/23/96)
According to a study from Statistic Canada, the Internet household penetration rate in Canada is 7.4%. In contrast, the U.S. figure is anywhere from 12% to 14%. Some have suggested that the substantial difference here is mainly because down south, the online hype has been much ballyhooed by companies such as America Online (AOL), CompuServe and other computer software and hardware vendors.
Let's take a look at some figures. Total number of Canadian households who are online: 600,000 Top five Canadian Internet service provider: Bell Canada Sympatico 140,000 America Online Canada 110,000 iStar Internet Inc. 60,000 HookUp Communications 50,000 Netcom Canada Inc. 40,000 Right now, much like their U.S. counterparts, most Canadians are using a dial-up connection typically running at 14.4Kbps or 28.8 Kbps modem speed via an Internet service provider (ISP) account. A small percentage would have ISDN access at 64Kbps or 128Kbps. Yet a variety of high speed Internet access modes already exist or just around the corner, and nearly all of them are capable of delivering download speeds that are much faster than even a T1 (1.5Mbps) connection. For example, satellite Internet access via DirecPC has been available for more than a year from Telesat Canada. Rogers Cablesystems, the country's largest cable company has announced plans to offer cable modem services to tens of thousands of households throughout the land. Telephone companies will also likely combat the cable on-slaught with their high speed ADSL (Asymmetrical Digital Subscriber Line) services. WebTV Network Inc., the one that promises one-thumb TV remote control surfing to the world wide web a la couch potato style will begin to surface in Canada in 1997. According to a study from a consulting group based in Toronto, the current Internet penetration rate in Canada could jump from the 7% or 8% to over 40% when WebTV services become available in early 1997. Quite a shocking claim. With speed comes higher prices, which generally means that the user would have to make an expensive initial hardware investment (cable modems, set top boxes, satellite dishes etc.) and/or a higher monthly fee than the usual CDN$20 to $25 access charges. But even with the enormous growth of the Internet market, ISPs are not making much money these days. Cheap Internet access (flat rate $20/month deal) just don't really generate profits. Many ISPs are looking forward to rely on emerging electronic commerce applications, the business intranet market, online advertising and the delivery of specialized content to increase their bottom lines. Meanwhile, phone companies are complaining about too much phones lines being tied up because there are more people jumping onto the Internet bandwagon than ever before. They say that an average voice call normally lasts three to four minutes but an average Internet call would linger on for an hour. Flat rate unlimited access at rock bottom prices is making the matter worse. In many cases, an ISP would automatically terminate a connection when there is no user activity for a fixed period of time, however, there are software that can keep users logging onto the network indefinitely. Back in the U.S., Netcom has just announced that they are dropping the US$19.95 flat rate access for the consumer market sometime early in the new year and instead will focus its effort on attracting corporate customers. Netcom has about 550,000 customers in the U.S. but hasn’t
been turning a profit until very recently in almost two years time. This
newest announcement from them has won the approval of the Wall Street crowd
which helped pushed the Netcome stock up by about 9 percent. Related stories: |
However,
there is no reason to believe that the Canadian consumer Internet usage
rate would stay at single digits for very long. After all, Canadians have
always been very receptive to high technology products and services.