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12:42 pm
Rogers currently has an effective monopoly on GSM transmission in Canada. Likewise Bell/Telus have the some monopoly on CDMA.
Technically both systems are excellent and neither has a clear advantage over the other. (Yes there are passionate people on each side who will argue differenly)
Since each side only competes with each other it has been very profitable for both to keep their rates high. (eg. Reason iPhone hasn't come to Canada is Rogers is currently charging business $500 -$600 for the service required to run the iPhone, (in the US/Europe iPhone packages are going for about $70). Rogers would have to readjust its rates and lose a chunk of its business revenue it it were to introduce the iPhone.
What's changed?
There is a chunk of cell bandwidth coming up for tender and the Government has alloted a significant portion of this to new players to promote competition. Also Rogers is under pressure to introduce the iPhone.
The new players in the market will have to decide, at least until they can put up their own towers, whether to use Rogers or Bell/Telus.
Bell/Telus have a slight cost advantage (CDMA requires fewer towers, and they have a higher data transfer rate). As Bell has many more towers in their controlled area than Telus, Bell has effective control of the rate they are charging for bandwidth. Telus has seen Rogers gaining market share and wants to be much more aggressive with it's pricing but Bell wants to maintain its higher profits.
Telus wants to gobble up all the bandwidth it can at the action, and give the new entrants into the Cell market an extremely low offer to both use their existing CDMA infrastructure, one that Rogers will have a tough time competing with. Bell is baulking at this strategy and thus Telus has threatened to go it alone and Build it's own series of towers using CMD.
The above info was given to me by my stock broker.
This is very early in the game and don't expect any decisions at least until the auction for new cell bandwidth has taken place.
What ever the outcome I suspect the consumer can expect to benefit by significant rate cuts in the future.
12:53 pm
March 31, 2007
Offline
Nice summary. Since I live near a major city centre and make nothing but simple calls on my cell phone, the network differences for me are negligible. I just want the freedom to switch phones whenever I want and to put a foreign SIM card into my phone when I travel -- only GSM provides that.
I'll be watching the situation with great interest to see whether any small players disrupt the market.
5:46 pm
There is a rumor going around that Telus is looking to switch over to GSM to take advantage of getting a share of the global roaming fees.
12:17 am
Nice rumor, too bad it makes no sense economically.
They may switch to GSM but global roaming fees certainly will not be a one of the salient points in their consideration.
1:59 am
Make sense to some:
http://www.thestar.com/article/293353
With more wireless competition looming, executives at Telus Corp. are believed to be mulling a pricey swap of the firm's network technology in a bid to offer subscribers a bigger selection of mobile devices and grab a larger slice of lucrative international roaming fees.
8:44 am
If you believe everything you read in the STAR, I have some great swamp land I'll sell you cheap in Florida.
The truth is that even if Telus were able to capture the majority of the of the roaming fees for international customers (those outside of North America) this sum would be so small compared to total income it would not be material.
10:32 am
If you believe everything you read in the STAR, I have some great swamp land I'll sell you cheap in Florida.
This has nothing to do with The Star no matter what are your views. The story was widely reported in the mainstream media, including the National Post. I guess their readers too are all over Florida swampland 😉
The truth is that even if Telus were able to capture the majority of the of the roaming fees for international customers (those outside of North America) this sum would be so small compared to total income it would not be material.
Right now Rogers has a stranglehold on GSM roaming in Canada. The fees they rapecharge oversseas visitors to Canada are testament to that.
No, that alone may not justify Telus' move to GSM. However, the Vancouver Olympics will be held in Telus' backyard. That they wouldn't otherwise be able to service visitors may be enough of an embarrassment to convince them to get GSM religion.
There are other technical and business reasons why a move to GSM would make good sense for Telus. I'll leave it to you to read the various media reports to discover what those are.
In any case, competition is good and real competition among the major players is even better. I look forward to Telus' entry into GSM.
