Change will end Rogers monopoly on iPhone sales
Eric Lam and Jamie Sturgeon
Sun
Bell Canada and Telus Corp. both announced Tuesday they will begin selling the iPhone next month, ending the stranglehold Rogers Communications Inc. has held on the device in the Canadian market since it launched last year.
The pair of moves come after Bell, on Monday, said it has completed a multimillion-dollar overhaul of its wireless network toward high-speed packet access (HSPA) technology and will introduce service next month.
“The new network will be ready to roll in November, quickly notching up competition and wireless choice for consumers and businesses across the country,” George Cope, chief executive of Bell, said Monday.
The transition to HSPA was critical because the iPhone is only designed to operate on that network standard. Both Bell and Telus have relied on CDMA, or code-division multiple access network technology, but have been overlaying their networks with HSPA gear over the past year.
Neither Bell or Telus released details on pricing for the iPhone, which has become the face of modern smart-phones.
Since 2004, Rogers has used HSPA technology on its network.
Phillip Huang, analyst with UBS Securities, anticipates the companies will increase their spending on handset subsidies, marketing and promotion for their HSPA service. As a result, he told clients that profit margins for both BCE and Telus could decrease from recent levels, particularly for BCE since it is estimated to have spent less on subsidies versus both Rogers and Telus.
The iPhone, like other smart-phones such as the BlackBerry, nets higher monthly revenue per user on average versus traditional cellphones that do not offer the same level of Web services, though analysts aren’t sold yet on whether the hefty upfront subsidies carriers pay for the iPhone are worth it.
Such developments come as Bell, Telus and Rogers brace for the arrival of new entrants analysts predict will steal market share away from all three.
Three new players in Globalive Wireless, Public Mobile and DAVE Wireless are anticipated to launch services in major markets later this year or early next. Globalive, which is undergoing a review of its ownership structure by Canadian regulators, has vowed to launch in Toronto and Calgary before the year is out.
