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Canada's traditional telecommunications monopolies have seen their market share eroded by alternative carriers since the country's long-distance telecommunications business was deregulated in 1992. The Stentor alliance of 11 provincial telephone companies has seen its share of the long-distance voice market decline from 75% to less than 65%, and the alliance is now to be loosened. The next area of competition will be the local market, with the regulatory agency having already announced interim regulations for number portability.

Many partnerships and alliances have been established in the Canadian communications and information technology sector. These agreements will form the basis for international activity. Data networking group Newbridge Networks has since 1992 been pursuing an affiliates strategy, which covers some 18 companies with total annual sales of C$220 million in the Kanata region of Ontario. These companies share risk, and are able to achieve a higher overall level of research and development.

There have been significant changes to the structure of the Canadian telecommunications sector. The long-term structure of this sector will be determined by customer demand for reliable, quick and easy access to video, voice and data communications. Canada's large regional telephone concerns are regarded as being well placed to benefit from emerging opportunities. However, some observers feel that the large carriers may not be able to respond quickly enough to moves made by smaller rivals.

Canada's federal regulators have now established a framework under which telecommunications service providers are able to compete for customers in the C$3 billion cable television industry and the C$8 billion local telephone market. However, there are still a number of important issues to address, and it remains uncertain how far deregulation will lead to changes in these markets. It is likely that the most successful service providers will be those which can offer a single package covering cable television, interactive communications and telephone services.

The Canadian telecoms market has seen a 'phoney war' between phone companies and cable television operators since direct competition was introduced in Aug. 1996. However, some analysts believe that a full-scale war is unlikely in the near future because of the high initial investment costs which would be required. At present, operators are concentrating on resolving internal problems and carrying out trials of services and technologies such as high-speed Internet access and Asymetric Digital Subscriber Line technology.

The Canadian telecommunications market is expected to be rationalised, with Unitel Communications perceived to be particularly at risk. Canadian cable television operator Rogers Communications may increase its stake in Unitel to 67%, with the remaining stake held by American long-distance telephone firm AT&T. Over 12 telecommunications companies that lease lines from long-distance carriers for reselling are expected to collapse in 1995. The Stentor consortium of telephone firms has rapidly changed its practices to successfully adapt to the deregulated market.

Canada aims to promote competition between phones companies and cable TV operators through a new policy developed by the Canadian Radio-television and Telecommunications Commission (CRTC). Canada already enjoys an efficient, low cost phone system, and barriers to entry are to be removed, while price regulation will be relaxed, allowing more efficiency to be achieved. Over 80% of Canadians have access to cable TV and fiber optic networks are gradually being installed.

Increased competition in the Canadian telecommunications market is expected to result from the July 01, 1994, introduction of a regulation requiring local phone companies to give their rivals equal access to the long-distance network. The newcomers to the market believe that this is their breakthrough, but many are not expected to survive a fierce price war. The members of Stentor, the consortium of local phone companies, has reacted aggressively to the threat of competition: for example Bell Canada has cut long-distance rates and offers many special deals to business clients and frequent users.

Canada's small number of large telecommunications and cable television companies currently hold an incomplete monopoly, but this is likely to change as they are forced to diversify. The Canadian Radio-Television and Telecommunications Commission (CRTC) has announced approval for seven new English language and two new French language speciality television channels, which will give a boost to cable television companies. Long-term competitiveness may depend on the country's ability to develop an advanced information delivery system.

The Canadian telecommunications market has seen increased competition during the 1990s, following the entry of telecom resllers and independent competitors. This has affected the long distance market share of established companies, which argue that resellers should contribute a greater proportion of profits to local services, provided free after payment of line rentals. Bell Canada and BC Tel, two of Canada's biggest established operators, also argue that new competitors are not contributing enough to local rates, but their appeal was turned down in 1992.