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Exclusivity Ending: iPhone Coming to Bell, Telus in Canada

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bell_telusFirst it was Orange and Vodafone (s vod) in the UK announcing plans to offer the iPhone, thus ending O2’s exclusive deal with Apple (s aapl), and now another member of the Commonwealth is following suit. In Canada, where Rogers is currently the sole iPhone provider, two of the the other three major carriers, Bell Canada (s bce) and Telus (s tu), have just announced that they, too, will offer the iPhone.

As was the case in the UK, Rogers saw a huge sales surge thanks to the iPhone when it was first introduced in Canada last year when the iPhone 3G was released. Telus and Bell have been playing catch-up ever since, in a market that has traditionally been pretty evenly split.

Too evenly split, if you ask people who live in Canada (i.e., me). Virtually no competition exists in the wireless market because only Rogers, Bell and Telus are allowed to offer service (relative newcomer Virgin is also involved, but they remain a low-cost provider and don’t mess with the big boys too much). As a result, the three rarely make any big moves to try and win away subscribers from the other two, so prices and contract requirements stay high. Very high.

Both Bell and Telus will be adding GSM capabilities to their existing CDMA 3G networks, in preparation for the 2010 Vancouver Olympic games. The fact that Rogers experienced 7 percent growth over the past year despite the recession, and that iPhone users spend on average one and a half times what the normal wireless customer does per month, probably also had something to do with the addition.

Bell will launch its GSM network beginning next month, and will begin selling the iPhone at the same time, according to sources speaking to The Globe and Mail, and an official release early this morning. It isn’t yet clear when Telus will begin offering GSM service, but the source reports that they will officially announce partnerships with Apple as early as today or tomorrow, and will begin selling the device in time for the launch of its new networks.

Clearly, Rogers hadn’t worked out any kind of exclusivity deal with Cupertino following the launch of the iPhone 3GS, probably owing to the fact that neither of its competitors even had the correct technology in place to allow the iPhone to function. As far as I know, this is the first instance of mobile providers changing the nature of their network rather than just asking a hardware manufacturer for a CDMA version of a device, something which I doubt Apple would respond favorably to anyway.

As of now, Rogers’ pricing for the iPhone is in line with U.S. pricing, but the subsidy is actually heavier because of the exchange rate. The provider does require a 3-year contract from new subscribers, though. It’s unclear yet whether Bell or Telus will offer a better deal. If either did, the iPhone could be the first step towards a drastically changed Canadian wireless landscape.

14 Responses to “Exclusivity Ending: iPhone Coming to Bell, Telus in Canada”

  1. The reason that Rogers had exclusivity in Canada is the fact that they had the only GSM/HSPA network in the country. Now that Belus (Bell/Telus) are rolling out UMTS it will be interesting to see how Rogers responds with their own network. Currently they only offer 3G in major centers and along major routes. This may force Rogers to expand their 3G rollout which will be great for smaller centers.

    I expect Telus and Bell will have cheaper iPhone plans than Rogers as a means to enter the market. However, they’ll have to be careful not to go too low as that could upset their legions of CDMA customers who will then demand better plans as well.

  2. If I recall correctly, Apple have rather onerous agreements with operators allowed to carry the iPhone that are specifically aimed at preventing discounting, so from that perspective don’t expect massive price distinction between the various folks supplying the iPhone.

    What is more important here is to recognise that the iPhone is merely a launch device for both Bell and Telus on their GSM/HSPA networks. Having a 2nd and 3rd carrier offering GSM/HSPA service to Canadians can only be a good thing, and will surely hark the introduction of other GSM devices, such as the BlackBerry Bold and Nokia E71/72 for example.

    Finally we may have some real competition to Rogers (we may even eventually see the demise of the 3 year contract).

  3. @dayhem – The data plans (for bell at least) will be cheaper. Also, I have found that if you compare the plans in depth (especially corporate ones), bell is usually cheaper than rogers….Can’t speak for telus though, I have had a bad experiences with them in the past have have not even checked their prices in like 4 years. I actually just bought a cell and did a comparison between many phones and plans between rogers and bell, and I went with Bell due to cost.

  4. I don’t really expect Bell and Telus to offer better deals if they also offer iPhones. In the past we’ve always seen the three major carriers keep the prices high for relatively similar phones and contracts.
    We will probably a change only when the new players will be ready to enter the market (Shaw, Videotron,…)

  5. ” It’s unclear yet whether Bell or Telus will offer a better deal. If either did, the iPhone could be the first step towards a drastically changed Canadian wireless landscape.”

    Uh yeah, right.

    1) I, for one, am not holding my breath on that one.

    2) That said, now that all the big boys are on the same standard, I suppose there is room to hope that over the long term, some real competition might start happening.

    3) See point one.