updated 01:50 pm EDT, Sun August 31, 2008
Bell Telus May Use HSPA
Both Bell Canada and Telus are on the verge of altering the Canadian cellular landscape by announcing a move to the same 3G cellular network type as Rogers, according to tips from alleged sources of the Financial Post. The newspaper believes the two rivals will reveal an upgrade from CDMA and EVDO-based networks to HSPA as early as this coming week and mutually rely on Nokia Siemens Networks to replace their existing network infrastructure over the space of a year. Neither would incorporate hardware for GSM both to shed legacy costs as well as to avoid compensating Rogers for roaming fees when customers are in areas not served by either Bell or Telus.
The switch would reportedly be costly for both firms, amounting to $1 billion in total expenses, but would also be a strategic move in light of the recently ended 2GHz wireless auction. The new carriers stemming from the auction would likely begin using some variant of HSPA and so would have to pay roaming costs when on Bell or Telus' networks, particularly in early stages when they have little network infrastructure of their own.
Crucially, a switch would also give both of the companies access to more desirable phones that have previously been off limits. As CDMA carriers, both Bell and Telus have been forced to carry devices limited to North America and often delayed conversions of existing GSM phones such as the CDMA edition of the HTC Touch Diamond. Moving to HSPA would give either provider a wider selection of phones and would grant them access to high-profile devices that have previously been exclusive to GSM or HSPA, such as the iPhone 3G. Rogers has previously reported a major shift in demand towards the iPhone and has hinted that a significant number of customers in the aftermath of the July launch have been converts from Bell or Telus.
Swapping to HSPA also puts added competitive pressure on Rogers, which has until now been able to retain more customers with the knowledge that customers switching to a competitor would have to purchase a new cellphone at the same time. The sharp division in networks was at one time thought to be a reason for unusually high data rates, which have lowered dramatically over the past year but were at one point as steep as $295 per month.
Neither Bell or Telus has been willing to comment on the rumored HSPA upgrade, which would be completed just a year before multiple North American carriers are expected to upgrade to 4G networks based on the Long Term Evolution standard.