updated 09:35 am EST, Mon January 14, 2008
Telus May Shift to GSM
Major Canadian cell carrier Telus is considering a largely unprecedented jump from a CDMA-based phone network to GSM, according to a report by the Toronto Star. Alleged industry contacts say the company has discussed the idea at board meetings and has been willing to explore the costs of rebuilding its network after recognizing that an upcoming frequency auction could tip the balance against the CDMA format. No move is certain, the purported sources say, but the ubiquitousness of GSM on international networks would help Telus' business by adding subscribers who need GSM phones to roam in Europe and most other countries.
Bell Canada has also reportedly contemplated the idea of using GSM but is too concentrated on taking its company private, the tip adds.
A swap would dramatically reorient the Canadian cellular market. While the American cellular market is split more evenly between GSM (AT&T and T-Mobile) and CDMA (Sprint and Verizon), only Rogers Wireless and its sub-label Fido maintain a national GSM network in the more northern country. Telus offering GSM service would end Rogers' effective monopoly of the standard in Canada and would also isolate Bell, leaving it as the only major CDMA provider.
Nonetheless, the real advantage may be in devices, both analysts and the company itself say. As roughly 80 percent of world phone users rely on GSM, more equipment is available for the network standard and often arrives sooner as well as at a lower price than equivalent CDMA models. There are "certain advantages" to a cellphone provider to explore this route, Telus chief Darren Entwistle said recently during a quarterly results call.
The iPhone in particular is considered a major blow to CDMA operators such as Telus, as the device has so far only been announced for GSM networks. Without an alternative, Apple's handset in its current form would be virtually required to support Rogers' network. Leaks through a Molson contest and other sources have pointed to an announcement of the iPhone for Rogers as early as the next few months and is expected to provide the lone GSM carrier with a significant edge in the market.