iPhone in Canada ... prepare for Apple's end run around Rogers

in iPhone edited January 2014
OK, several months ago I suggested in a number of places that the Steve® has run into quite a forceful personality in Ted Rogers. For those of you living elsewhere besides Canada, Ted Rogers is the incredibly wealthy and inflexible CEO of Rogers Communications, Canada's largest cable/telcom/etc company. And Canadian telcos like Bell, Rogers and Telus has a long history of charging customers through the nose for their services. Most Canadain cell phone plans are outrageously priced compared to other countries, and even basic cable plans can run $49/month in many markets.

The problem for the iPhone in Canada is that Rogers has the only GSM network ... Bell and Telus both have CDMA.

I'm telling you, when Steve told Ted that he'd have to give up his $150/month cell phone plans and give Apple part of the monthly fees and give users cell phone plans with unlimited data plans for CDN $50-60/month Ted simply laughed in his face.

My suggestion months ago was that we haven't heard anything about the iPhone and Rogers because Apple was planning an end-run around Ted by shopping the iPhone to Bell or Telus. But how, since both the others are CDMA networks?

Well ... in a remarkable bit of news I read in the Globe and Mail's Business section last week, Telus has announced that within a six months (and before the end of 2008) they are switching their network over to GSM. To carry new and exciting phones, they say.

What a remarkable coincidence, eh? My prediction stands ... Rogers have shot themselves in the foot with their price-gouging demands and will lose the iPhone to Telus. And will regret it, I'm sure. Any other fellow Canadians think so?


  • Reply 1 of 6
    Telus considers dumping its 'Betamax' of wireless networks

    January 12, 2008 04:30 AM EST

    Chris Sorensen

    Business Reporter


    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.

    In the wireless equivalent of moving from Betamax to VHS, Telus executives are considering adopting new technology "as early as this year," industry sources say. The change would effectively make all or part of Telus's CDMA network compatible with the GSM-based systems operated by most carriers outside of North America. The two acronyms stand for code division multiple access system, and global system for mobile communications, respectively.

    The idea "has been presented at the board level and is being actively considered," said one source familiar with the situation who asked not to be identified. The source cautioned that there were no guarantees Telus will go ahead with a changeover, which analysts say could cost about $500 million.

    A Telus spokesperson declined to comment.

    The CDMA format is still common in North America but is increasingly falling out of favour as the rest the world moves toward GSM. A switch would allow Telus subscribers to roam on more overseas networks and choose from a much larger (and cheaper) selection of cellphones built for global markets, where some 80 per cent of cellphone users now operate on a GSM format.

    Telus would also benefit by getting a slice of the roughly $500 million in annual roaming fees that now goes to Rogers Communications Inc. At present, Rogers operates Canada's only coast-to-coast GSM network, a position it solidified after it beat out Telus's bid to buy GSM-operator Microcell Telecommunications Inc., the operator of the Fido brand, three years ago.

    Telus executives have previously said they would prefer to stick with their existing network, but some believe the mood within the company's Vancouver headquarters changed after the carrier learned in late November that Ottawa aims to promote wireless competition by setting aside airwaves for new entrants in a forthcoming auction.

    Any new wireless carrier is expected to build a network using GSM-based technology.

    "I think there's a strong argument to be made for biting the bullet and doing it now," said Dvai Ghose, an analyst at Genuity Capital Markets. "If Telus manages to accomplish (the switch) with a modicum of success, I think it's a positive for Telus and a negative for Rogers, which loses exclusivity in Canada."

    Bell Canada Inc. is facing the same pressures with its CDMA-based network, but that carrier is believed to be focused on completing a $51.7 billion privatization deal.

    A Bell spokesperson said the carrier is committed to the CDMA platform, citing the technological advantages and North American coverage. CDMA has historically claimed better capacity for voice and data communications.

    Telus, by contrast, has apparently solicited multiple bids from telecom-equipment makers in an effort to explore different transition scenarios and the costs.

    The options range from a complete network swap to building some sort of hybrid network that would run certain GSM devices.

    Of course, such a strategy has its downsides.

    Amit Kaminer, an analyst for consulting firm The Seaboard Group, said Telus may be wise to sit tight until so-called 4G, or fourth generation, wireless technologies effectively merge the two standards. That way Telus could avoid the expense of overhauling its current "3G" network twice, Kaminer said.

    The gamble is that no one knows for sure when a single standard will become commonplace. Some analysts say Telus could be waiting as long as five years, a lifetime in the fast moving telecom sector.

    In the meantime, both Telus and Bell could face significant disadvantages in getting hold of the latest devices.

    "It's very difficult for them to compete on a product like the Motorola RAZR when you're getting it nine months late and it's several hundred dollars more expensive," said Genuity's Ghose.

    One recent high-profile example is Apple Inc.'s much-ballyhooed iPhone, which was launched last June as a GSM-only device. Plans for a CDMA version have yet to be announced, making it a near certainty it will end up with Rogers when Apple finally decides to launch the iPhone in Canada.

    Telus CEO Darren Entwistle refused to comment directly on the possibility of a GSM switch when asked about it during Telus's third-quarter conference call with analysts. He did, however, acknowledge "certain advantages" relating to the availability and cost of GSM devices, as well as the potential for roaming revenues with "lucrative" margins.
  • Reply 2 of 6
    Hopefully we will either see some news from Apple tomorrow that the iPhone will support CDMA or that Telus is switching to GSM. I would love it if I could stay with Telus. My contract expires in about 6 months so if they could work out that timing nicely for me, that'd be great.
  • Reply 3 of 6
    daveyjjdaveyjj Posts: 120member
    Originally Posted by Phoenix29 View Post

    A Bell spokesperson said the carrier is committed to the CDMA platform, citing the technological advantages and North American coverage.

    While the entire rest of the world is on GSM, Bell lags behind once again. The Star too, eh? Thanks for posting that article Phoenix29.
  • Reply 4 of 6
    Verizon is going to GSM as well.
  • Reply 5 of 6
    No problem for the article. It sucks that Ted Rogers is being such an ass about bringing the iPhone here to Canada. I am giving it until late Spring and if that doesn't happen then I am driving to Buffalo to pick up my iPhone and hack it which I really don't want to do but I really really want an iPhone.
  • Reply 6 of 6
    Apple May Announce Canada IPhone Tomorrow, RBC's Abramsky Says

    By Chris Fournier


    Jan. 14 (Bloomberg) -- Apple Inc. may unveil a version of the iPhone for Canada as early as tomorrow, RBC Capital Markets analyst Mike Abramsky said.

    Chief Executive Officer Steve Jobs may make the announcement during his speech at the Macworld conference, Abramsky said today in an interview. Apple will probably outline an agreement with Rogers Communications Inc., Canada's largest mobile-phone company, for iPhone service, Abramsky said.

    Apple released the Web-surfing iPhone in the U.S. in June, and sold almost 1.4 million devices in the first three months. Toronto-based Rogers, which competes with Telus Corp. and BCE Inc., is the only wireless operator in Canada that uses the same technology as the iPhone.

    ``There's a very good chance that Apple will announce or discuss some kind of other carrier roll-outs, beyond the ones it has done in Europe and the U.S.,'' said Abramsky, who is based in Toronto. ``There is definitely very strong demand and interest here.''

    Jobs may also announce a movie-rental service, which would let iTunes customers download films over the Internet and watch them for a limited time, Abramsky said. He expects Apple shares to perform better than competitors.

    Rogers spokeswoman Jan Innes declined to comment. Apple spokeswoman Kristin Huguet didn't immediately return a call seeking comment.

    Apple climbed $5.21, or 3 percent, to $177.90 in Nasdaq Stock Market trading at 11:07 a.m. New York time. Rogers fell C$1.70, or 4.2 percent, to C$38.60 on the Toronto Stock Exchange.

    To contact the reporter on this story: Chris Fournier in Montreal at [email protected]

    Last Updated: January 14, 2008 11:24 EST
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