Telecommunications statistics

Operating profits for wireless service providers soared to record levels in 2002 as a result of strong growth in operating revenues and declining operating costs.

The wireless industry's operating profits, used as an indicator of its financial performance, reached more than $1.1 billion in 2002. This was 19 times the level of only $60.2 million in 2001. Wireless operating revenues increased 14.9% to more than $7.6 billion.

The story in the wireline industry was sharply different. Operating profits fell 13.6% to nearly $3.9 billion, as revenues declined 3.1% to $24.0 billion.

On a quarterly basis, operating revenues for the wireless industry jumped 16.0 % in the fourth quarter compared with the fourth quarter of 2001, surpassing $2.0 billion for the first time. Wireless operating profits soared to $277.3 million, compared with a loss of $95.1 million in the fourth quarter of 2001.

Revenues and profits both declined in the wireline industry in the fourth quarter. Revenues fell 4.1% to nearly $6.3 billion, the fourth straight quarterly year-over-year decline. Profits were down 7.5% to just over $1.0 billion, the third straight drop. Stiff competition in the long-distance market, lower intra-industry revenues and the slow decline in the number of access lines exercised downward pressure on revenues and profits.

The gradual slowdown in the year-over-year increase in the number of subscribers to wireless services during the last three years continued in the fourth quarter. The number of these subscribers rose 9.1% from the fourth quarter 2001, only half the average pace of 17.7% for the first three quarters.

The gradual transition to digital services also continued. Digital subscribers represented almost 76% of all subscribers to wireless services at the end of 2002, compared with 64% at the end of 2001 and 53% at the end of 2000.

Both the wireless and wireline industries sharply reduced their capital expenditures last year. For the year as a whole, these expenditures fell 21.6% in the wireline industry and 35.0% in the wireless industry.

Note: The term "operating profits" is defined as operating revenues less operating expenses (including depreciation and amortization) and, therefore, measures earnings before interest, taxes, non-operating and non-recurring items. This measure is used as an indicator of the operating performance of the industry. These data are not necessarily comparable to different measures of profits published elsewhere.

Information on methods and data quality available in the Integrated Meta Data Base: survey number 2721.

The fourth quarter 2002 issue of Quarterly telecommunications statistics (56-002-XIE, $21/$40) will be available soon.

For more information, or to enquire about the concepts, methods or data quality of this release, contact Cimeron McDonald (613-951-2741) or Jo Anne Lambert (613-951-6673), Science, Innovation and Electronic Information Division