Canada’s three main telecom stocks had a “Goldilocks” year in 2016.

In U.S. dollar terms, the trio—BCE Inc. (TSX: BCE, NYSE: BCE), Telus Corp. (TSX: T, NYSE: TU) and Rogers Communications Inc. (TSX: RCI.B, NYSE: RCI)—delivered an average total return of 17.9%.

That trailed the S&P/TSX Composite Index, which generated a total return of 24.5%, but this performance was largely due to resource stocks’ strong rebound off their cycle lows.

Regardless, income investors are likely more than satisfied by the fact that the three Canadian telecom giants’ stocks have an average yield of around 4.3%.

Their high (and rising) dividends are supported by their commanding market share. Between them, the so-called Big Three control 90% of the Canadian wireless market.

With all three poised to report fourth-quarter earnings, now is a good time to check in on them and see what the year ahead might bring.

Wireless Switch Continues

As Canadian Edge chief strategist Deon Vernooy wrote in August, wireless growth continues unabated in Canada:

“As Canadians steadily transition from landline phones to mobile phones, the landline business is in a long-term decline, while mobile continues to be a growth business. We expect the trends to continue for several more years, as mobile penetration in the Canadian market is still relatively low, at 82%, compared to 110% in the US and up to 180% in some European countries.”

That’s reflected in the telcos’ third-quarter results: BCE added 107,265 net new postpaid subscribers, compared to just 77,655 a year earlier; Rogers tacked on 114,000, up from 77,000; and Telus added 87,000, up from 69,000.

Meantime, Canadian smartphone users—like everyone else—are hooked on mobile data. According to a 2016 report from the Canadian Radio-television and Telecommunications Commission, data usage spiked 44% from 2014 to 2015.

Telus Guards Its Turf

Telus has the second-largest wireless operation, with 8.5 million subscribers, along with 1.6 million Internet users and 1.0 million pay-TV subscribers.

Customer service is a strength: Its wireless business boasted the lowest churn rate among post-paid subscribers in the third quarter: 0.94%, compared to 1.26% each for Rogers and BCE.

That’s a big plus these days, as all three telcos face a challenge from Shaw Communications Inc. (TSX: SJR.B, NYSE: SJR), which entered the wireless space after buying upstart Wind Mobile in 2015.

But the Big Three need not panic yet.

For one, Wind (now called Freedom Mobile) has less coverage and mainly uses the older 3G standard. It’s also starting from a low base—just over 1 million subscribers—and it added just 9,470 net new users in its latest quarter.

Telus boosted its payout by 9.1% last year, aligning with management’s stated plan to hike by 7% to 10% annually through 2019. However, free cash flow has fallen short of the dividend in recent quarters, so that’s something to watch. The stock yields 4.3%.

BCE Set to Close Big Deal

BCE has the smallest wireless business of the three, at 8.3 million subscribers. It also has 1.3 million pay-TV subscribers and 3.5 million Internet customers.

But it has a large (and growing) media arm, with 28 TV stations (including the national CTV network), 30 specialty channels, such as TSN (sports) and BNN (business news), 105 radio stations, and four pay-TV networks.

In late 2014, it launched the CraveTV streaming service, and in the third quarter, Crave’s subscriber count ticked over a million.

Crave’s main Canadian rival, Rogers’ Shomi, shut down in November. But it will take a while for Crave to catch up with Netflix (NSDQ: NFLX), which streams into 5.7 million Canadian homes.

BCE also aims to close its acquisition of Manitoba Telecom Services Inc. (TSX: MBT) early this year, which will bring 1.3 million new telephone and wireless customers.

The company hiked its dividend by 5.0% last year, and we expect further dividend growth ahead. The stock yields 4.8%. See the January issue of Canadian Edge for our latest analysis of BCE.

Rogers Changes Direction

Rogers recently became the first Canadian wireless carrier to break 10 million subscribers. It also has 2.1 million Internet users, 1.8 million pay-TV subscribers and 1.1 million phone accounts, in addition to TV and radio stations, a publishing business, and the Toronto Blue Jays baseball club.

The company hasn’t announced a payout hike in nearly two years. Its stock also trails its rivals in terms of yield, at 3.8%.

Earnings per share fell 52% in the third quarter, to $0.43, missing analysts’ forecasts, largely due to the Shomi shutdown. However, free cash flow easily covered Rogers’ dividend through the first nine months of the year, so it has some flexibility here.

Something else to watch: the corner office. In October, CEO Guy Laurence, who formerly led Vodafone Group (NSDQ: VOD), stepped down, to be replaced by former Telus chief Joe Natale. But Natale won’t join Rogers until the summer, leaving interim CEO Alan Horn in charge for now.