Telus considering ditching CDMA

When comparing CDMA services vs. GSM services, you’ll find few people who prefer the latter. CDMA, on the whole, provides a better voice and data experience for the end user. However, there’s a flip side to this competition. Because GSM reaches further around the globe than CDMA, the majority of the world’s handsets are made for GSM networks. This is why Telus is considering a change of format. It’s tough to stick with a certain technology if the entire world is moving in another direction. Even Verizon Wireless, America’s largest CDMA provider, will eventually wave goodbye to CDMA. They’ve chosen LTE technology, a GSM-based technology, to power their eventual 4G network, scheduled for launch around 2012. This move would allow Telus to move in the same direction when they’re ready to upgrade their network.

The idea “has been presented at the board level and is being actively considered,” said one source familiar with the situation who asked not to be identified. The source cautioned that there were no guarantees Telus will go ahead with a changeover, which analysts say could cost about $500 million.

The move would benefit Telus greatly. Beyond their subscribers being able to roam internationally, Telus could also see a portion of roaming fees paid by other operators for their subscribers to roam on other networks. Rogers rakes in $500 million annually in this regard. Even if Telus grabbed a fifth of that, it would help immensely in subsidizing the building of the network.

“I think there’s a strong argument to be made for biting the bullet and doing it now,” said Dvai Ghose, an analyst at Genuity Capital Markets. “If Telus manages to accomplish (the switch) with a modicum of success, I think it’s a positive for Telus and a negative for Rogers, which loses exclusivity in Canada.”

I like that link of logic. If you’re going to eventually go to GSM for your fourth generation network, you might as well get a head start now. No reason to sit back and wait for things to happen. If Telus thinks that their customers would prefer a larger handset selection and further-reaching roaming capabilities, then they should pull the trigger. Then again, it’s not my $500 million. [The Toronto Star]]]>