Canadian Carriers May Switch To GSM - InformationWeek

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7/23/2008
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Canadian Carriers May Switch To GSM

The move from CDMA could allow Bell Canada and Telus to offer customers the iPhone 3G.

Canada's second- and third-largest wireless carriers may be switching their cell phone network technology from CDMA to a GSM-compatible one, according to a report from UBS Investment Research.

The shift would allow Telus and Bell Canada to offer a new variety of handsets that have only been available on the market-leading Rogers Wireless. A change would also give the two wireless carriers revenue from GSM-using international customers who are roaming while in Canada.

Bell and Telus are reportedly looking to switch to either High Speed Packet Access or Wideband-CDMA technology, which are similar to GSM in how they transmit data. The move to GSM would cost the companies a combined $360 million to $480 million, according to the report. Representatives from Bell and Telus did not comment.

The majority of carriers around the globe use GSM technology for their cellular networks, and companies like Telstra in Australia and SKT in South Korea have recently made the switch from CDMA. Additionally, handset manufacturers are increasingly producing consumer-friendly phones that are GSM-only.

"If Telus (and BCE) comes through with this decision, one could conclude that they had little choice if they want to secure their future competitive position," UBS said.

A switch could enable Canadian wireless subscribers to take their phones with them when switching providers. It could also allow Bell and Telus to offer the popular iPhone 3G, a GSM-only device.

Rogers is the only Canadian company that carries Apple's handset, but there's no exclusive agreement like AT&T has in the U.S. market. But many Canadian customers complained that Rogers' mandatory plans were too expensive, and the required three-year contract was too long. A switchover could provide these customers with more carrier choices for Apple's popular phone.

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