Telus Mulls Technology Upgrade
17/09/2008
Telus Corp. continues to mull adopting new wireless technology that would allow it to sell some GSM-only devices such as Apple Inc.'s new iPhone, but CEO Darren Entwistle is giving no timelines on when a final decision on the matter will be made.
Speculation had been mounting that Telus was set to reveal its network evolution strategy yesterday, but Entwistle said it was more important to make the right technology decision than to "synchronize" it with the release of quarterly financial data. "Our current deliberations include evaluating the various technology evolution paths to 4G, gathering real data on technologies, costing and the timing of their implementation," said Entwistle, referring to so-called "fourth generation" wireless technologies. He said any strategy must take into account the interests of Telus shareholders and existing network investments.
At present, both Telus and Bell Canada Inc. run wireless networks based on CDMA. By contrast, GSM technology has emerged as a global standard. That often gives carriers such as Rogers Communications Inc., the country's only GSM carrier, earlier access to the latest devices and more opportunities to cash in on lucrative roaming charges. While the two technologies are expected to merge with the adoption of fourth generation networks - referred to as LTE, or long-term evolution by CDMA carriers - both Telus and Bell are said to be considering a move to GSM-compatible 3G technologies in the interim.
"Based on our industry checks, we believe there is a high degree of likelihood that Telus and BCE will soon finalize the decision and shift away from CDMA," said Jeffrey Fan, an analyst at UBS Investment Research, in a note to clients last month.Fan estimated the overlay would cost as much as $480 million for both carriers combined. Bell and Telus have an agreement that lets users roam on each other's networks in Canada.
Telus also raised its full-year sales estimate as its wireless subscriber additions rose by 37 per cent in the quarter to 175,600. That included subscribers who signed up for service with the phone company's new discount brand Koodo. Investors responded by pushing up Telus shares nearly 5 per cent to $40.83, up $1.88. However, average revenue per user, a closely watched measure, fell 1.4 per cent during the quarter to $62.73 per month.
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