Canada’s telecommunications industry is under pressure to keep making sufficient investments in its infrastructure to keep pace with demand, according to a report from PricewaterhouseCoopers.

The report, commissioned by the Canadian Telecommunications Association, said the country’s telecom firms are responding to increasing consumer demand with faster speeds and lower prices. It cited declines of more than 50% in the CPI component for cellular service between 2020 and 2024. Yet those companies face challenges such as high population dispersion, low population density, challenging terrain and weather, and high spectrum costs, which make investing in infrastructure more expensive than in other countries.

The capital intensity ratio in Canada between 2020 and 2024 was 18%, versus 14% in the U.S., 17% in the U.K. and 10% in Australia, the report said.

“Slowing revenue growth and a complex regulatory environment are making it harder to sustain the investments needed to keep pace with demand,” according to the report.

PwC found the telecoms sector has seen productivity growth of 12.4%, compared with 1% in the country as a whole. The sector contributed an estimated $87.3 billion to Canada’s GDP, and supported more than 660,000 jobs across industries, with 65% of the GDP contribution generated in industries outside the telecommunications sector, leading to their increased productivity and business capabilities.

The report suggested policy makers should focus on creating a regulatory environment that encourages long-term investment and renewing outdated regulation. The dynamic nature of the Canadian telecommunications sector has resulted in an accumulation of regulations, which has increased operational costs and potentially strained network investment, the report said, adding regulators should consider approaches from global peers such as the U.S. which is conducting evaluations of regulations to alleviate unnecessary burdens.