GSM Competition for Rogers To Come From … Bell?

Posted by Eric March on July 22, 2008 at 3:24 pm

Now there was a twist I was absolutely not expecting. It’s almost Hitchcockian.

The biggest gripe for Canadians when it comes to mobile technology? Rogers has the lock on the GSM market. (Fido is owned by Rogers, remember.) They have no useful competition to force them to offer more reasonable rates, and except when users band together in large numbers and scream loudly enough, as was the case with the recent iPhone rate fiasco, we have little say in how they choose to shaft us. Threaten to go to Bell? Sure, we could — but that’s hardly much of a threat. Bell is CDMA, and while they offer more attractive rates, it’s only because they don’t get all the cool phones because many of the cool phones aren’t available to CDMA providers, and that’s because CDMA is dying. With only 20% of the global wireless market, CDMA has been steadily losing out to GSM, which most of the rest of the world uses.

And in a startling turn of events, both Bell and Telus, the second and third largest wireless carriers in Canada behind Rogers, have finally decided to toss in the CDMA towel and cast their lot with GSM.

In case you TLDR’ed that: Bell and Telus are converting to GSM.

Any Canadian will be able to tell you how fundamentally game-changing that is. If Ted Rogers wasn’t particularly concerned about the spectrum auction generating some minor contenders, he ought to be stocking up on his Depends now. Bell is huge. They were the home phone monopoly in Canada for the longest time, and even after the government deregulated the telecom industry, no significant competition ever cropped up. (Sprint tried but failed quite spectacularly.) Although Rogers offers home phone technology, it isn’t quite up to snuff, and Bell is still the de facto monopoly.

Bell switching to GSM, and Telus following suit? That ought to be enough to have Ted very, very concerned. Obviously this isn’t going to be an overnight thing; the move will reportedly cost an estimated $360-480m, and Huawei and Nokia-Siemens are favourites to win in the list of contenders to handle the transition.

But it’s not the iPhone that prompted Bell to take the plunge - or not only that. Besides being the industry standard wireless technology, GSM also makes it possible for switchers to bring their phones with them to Bell or Telus. It also allows the two telecoms to benefit from lucrative roaming charges when visitors from abroad bring their GSM phones with them — and if not roaming charges, then prepaid SIMs for local calling. Either way there’s big money in it for them.

But the big winners here will be Canadian wireless afficionados. Between Bell and Telus switcing to GSM and new entrants to the arena popping up from the wireless spectrum auction also expecting to use GSM technology in the next 12-18 months, Rogers is going to have a great deal of competition in a very short period of time, some of it a clear and present threat to Rogers’ own dominance. This means that we’re going to be seeing wheels turning and deals being spun left and right as Rogers tries to keep their customers from being swayed by the sweet sounds of the competition luring them with even better deals.

Oh, these are definitely interesting times.

(via CBC News)

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