During December and January, the trend observed in November became more pronounced: theTSX showed relative resilience, while the TTTS continued to decline. As at January 31, 2025, the TSX showed a slight decrease of 1.52%, while the TTTS registered a more marked decline of 9.68% over the period.
TTTS experienced a significant fall in mid-December, a move that can be attributed to the CRTC's confirmation of access conditions for wholesale fiber Internet services. This decision kept up the pressure on major providers such as Bell, Rogers and TELUS, heightening investor uncertainty about the sector's future profitability.
In addition, the CRTC's December 12, 2024 announcement of enhancements to the Broadband Fund was aimed at accelerating Canadians' access to high-speed Internet services. While this initiative may be seen as positive for service accessibility, it has also intensified competition, limiting the pricing power of the major providers.
The January entry marked an attempt to turn around TTTS, but the outlook remained uncertain. In particular, Rogers' share price was affected by mixed financial results announced on January 30, 2025, showing an increase in revenue, but lower-than-expected subscriber growth. In addition, the Competition Bureau's legal action against Rogers in connection with the advertising of its unlimited data packages fuelled volatility in the sector.
Finally, Bank of America's downgrading of BCE and Rogers on January 14, 2025 has heightened investors' negative perception, signalling persistent challenges for companies in the sector.
The evolution of TTTS over the coming months will depend on the ability of telecommunications companies to adapt to the new regulations and maintain their competitiveness. The focus will remain on the CRTC's decisions and the strategies put in place by the major players to preserve their profitability.
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