By J. Sturgeon | Financial Post | 10.05. 2009Bell Canada has cleared the way to begin offering the vaunted iPhone, announcing yesterday it has completed a long-awaited overhaul of its wireless network that will enable the carrier to support perhaps the most iconic handset in the history of the cellphone and smash the de facto exclusivity chief rival Rogers Communications Inc. has held over the device.
For years, both BCE Inc.' s Bell Canada and Telus Corp., the nation's second-and third-largest cellphone companies, respectively, have trailed Rogers, largely because of network superiority. Since its acquisition of Microcell in 2004, Rogers has used next-generation gear called high-speed packet access (HSPA), while the other two relied on CDMA, or code-division multiple access.
A primary advantage of HSPA is the favour it has gained with handset makers as it has overtaken CDMA technology with cellphone carriers around the globe.
Among the HSPA users is Cupertino, Calif.-based Apple Inc., which designed its smash-hit iPhone expressly for HSPA networks.
Having the the only compatible network in Canada, Rogers has been able to offer the iPhone while Bell and Telus watched from the sidelines.
That competitive handicap was dissolved yesterday as Bell announced it has completed a year-long transition to HSPA 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," said George Cope, chief executive of Bell.
In an interview, Wade Oosterman, president of Bell Mobility would not confirm whether Bell and Apple were in talks to bring the iPhone to Bell in light of the move, but said he anticipated making a new handset announcement soon. Sources suggested both Bell and Telus, which declined to comment on when it would introduce its HSPA upgrade, were close to securing a deal with Apple.
Bell's move, made months ahead of schedule, comes as Bell, Telus and Rogers brace for the arrival of new entrants analysts predict will steal market share from all three.
Three new players in Globalive Wireless, Public Mobile and DAVE Wireless are expected to launch services in major markets this year or early next year. 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.
"[With] the coming arrival of new wireless brands and networks, Bell will be ready to compete," the Montreal-based company said.
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 and cannot be charged higher data fees, although analysts aren't sold yet on whether the hefty upfront subsidies carriers pay for the iPhone are worth it for them.
Both Bell and Telus announced last fall they had begun pouring millions into the network transition ahead of the 201 0 Olympic Games in Vancouver, which will see tourists from around the world converge on B.C., netting the companies lucrative revenues from international roaming fees.
Bell also recently announced an agreement with U.S. giant AT&T that will lock up roaming payments from U.S. customers travelling within Canada.
The earlier rollout will see Bell widen its handset offering for the holiday season as all three incumbents face pressure to capture as many customers as they can ahead of the market shakeup.
The move, which overlays HSPA gear on Bell's existing network, also means Bell can offer devices for both network standards. Bell is already the exclusive carrier of the Pre. Made by Palm, the CDMA-only handset is considered a chief rival to the iPhone.
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