Bell and Telus team up to overhaul wireless network
Move will allow companies to offer more cellphones, including Apple's iPhone
Canadian telecom giants BCE Inc. and Telus announced Friday they will work together to overlay their existing wireless networks with a cellular technology more popular around the world, a move that will allow both companies to compete more directly with Rogers Communications Inc.
BCE unit Bell and Telus both announced Friday they would be making a significant investment in upgrading their networks, adding high speed packet access, or HSPA, cellular technology to their third-generation networks.
The two companies said the upgrades to their faster third-generation networks should be complete by 2010 and will pave the way for the transition to adopt fourth-generation Long Term Evolution technology, a developing global standard for even more advanced phone capabilities expected to be available in 2012.
Both companies currently use a communications standard known code division multiple access (CDMA) for their networks.
While CDMA technology is common in North America, most of the rest of the world uses the rival Global System for Mobile Communications (GSM) — of which HSPA technology is one version.
About 75 per cent of cellphones are made for the GSM standard, including Apple Inc.'s iPhone and Research in Motion's BlackBerry Bold.
Rogers is currently the only national wireless company to use GSM in Canada, allowing them to be the exclusive carrier of both the iPhone and the Bold when the products launched nationally earlier this year.
New entrants to the market who won the rights to spectrum during the federal government's sale of wireless airwaves earlier this year are also expected to build their networks using GSM technology.
Bell and Telus said a network sharing agreement between the two companies will allow them to speed the build-up of the network and provide the widest reach, particularly to remote and rural regions.
Telus CEO Darren Entwistle called the move a win for consumers.
"Telus's investment in next-generation wireless services will give our clients more wireless functionality, including international roaming, fast network speeds and a compelling selection of globally compatible handsets and devices," he said in a statement.
Bell President and CEO George Cope said the upgrade to the network is part of Bell's commitment to be Canada's leading communications company.
"This investment initiative builds on our industry-leading wireless service ... to deliver Canadians the broadest choice in high-speed wireless service, while confirming our path forward to LTE, the global 4G wireless broadband standard," he said.
Rogers spokesperson Liz Hamilton said the company is not surprised the two carriers want to use HSPA technology, which she said Rogers added three years ago. She said that experience has given them a faster and more reliable network and isn't something that will be easily replicated.
Neither company said how much the transition would cost, but a report in July from UBS Investment Research put the combined cost for the two companies at between $360 million to $480 million.
The companies said Nokia Siemens Networks and Huawei will provide the equipment for their new wireless infrastructure.