Bell and Telus Move to GSM HSPA

No more guessing if or when – Bell Canada and Telus have announced that they will be rolling out a joint nationwide HSPA network in Canada, to be completed by early 2010 in time for the 2010 Winter Olympics in British Columbia. There are estimates that the cost of the joint venture network is in the half billion dollar range, which isn’t surprising, given that nearly a billion has been spent on the EV-DO network.

The HSPA migration will serve as a jumping off platform to 4G LTE, which both Bell and Telus are committed to. The existing CDMA EV-DO network will remain and will be maintained by both Bell and Telus. There are no plans as of yet to discontinue that network.

I’m really looking forward to some major competition for Rogers, even without the need for another entrant into the wireless market in Canada.

Bell’s press release

Telus’ press release

Telus and Bell Sitting in a Tree

A move to GSM for the Telus and Bell cellular networks has been rumoured many times over the years, but the latest article from the Financial Post seems to be a bit more concrete than usual. According to the FP, Bell and Telus will announce a partnership to develop a 3G GSM network this week, dumping $1 billion over the next year to build it out. It’ll be a bold move on their parts, but one I think will benefit Telus especially. Even with the current CDMA network, Telus has been doing very well, adding a record number of subscribers in the most recent quarter. Just imagine what that will turn into with a more ‘open’ network and a wider selection of devices.

In my case, any more competition for Rogers is a good thing. They could certainly learn something from Telus’ great customer service. There’s nothing quite like waiting on hold for 45 minutes only to find out you were transferred to the wrong department…

More HD-DVD Woes and Telus’ Problems

Final nail in the coffin? Wal-Mart stores decided, this past Friday, that its high-def optical player of choice would be Blu-Ray.  Sales of HD-DVD players and media would end by June of this year. But with the seemingly inevitable death of HD-DVD, it remains to be seen how many people will actually buy players or media up until June. Wal-Mart’s announcement comes on the heels of similar announcements by Netflix, and then Best Buy, earlier this week.

In a related note, sources are saying Toshiba is in the final steps of closing down operations of its HD-DVD business. In light of overwhelming support for Blu-Ray, I imagine Toshiba has decided it’s for the best to throw in the towel, as opposed to continuing the money-losing tactic of severely undercutting Blu-Ray players on price. I’m still with Steve Jobs on this whole format war though – I don’t particularly care, regardless of the victor, as I see video downloads taking an increasing share of the market. I have a PC hooked up to the HDTV through HDMI and sound going out through optical. What incentive is there for me to spend hundreds upon hundreds of dollars for Blu-Ray or HD-DVD when I can be watching 720p or 1080p content, played through the computer? Plus, I have the added benefit of being able to game on my HDTV – consoles just don’t do it for me. Computers are playing an increasingly large role in home multimedia, cutting the market for optical disc and player sales.

And now onto Telus’ Q4 earnings, announced earlier this week. Telus’ CEO, Darren Entwistle, was disappointed in its wireless subscriber additions, commenting, “Clearly this aspect of Telus’s performance is one that I am less than satisfied with“. Net subscribers were 161,400 in the 4th quarter, down 11% from the previous year.

Wireless penetration in Canada is reaching over 60%, and with rates as high as they are, I’m not surprised subscriber sign-ups are starting to slow, especially in the CDMA carriers, Telus and Bell. Having worked one of my co-op semesters at Bell Mobility, I’ve performed a lot of market research – although wireless minutes of usage per month per user in Canada is significantly lower than in the United States (somewhere in the range of 500 minutes and 850 minutes respectively), ARPU is actually significantly higher in Canada than the United States. The exorbitant wireless service prices in Canada are a well-publicized matter. Just do a search in your favorite search engine and you’ll find plenty of material to back that up.

In the past, the higher pricing was sustainable – ‘it was what the market was willing to pay‘. But as these new subscriber numbers are starting to show, perhaps it’s time to rethink that mentality