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What a Bell & Telus iPhone means

October 5, 2009

If you believe what The Globe & Mail reported earlier this evening, the iPhone is finally headed to Canada’s other two big mobile providers. This comes after the companies worked around the clock and at great cost to launch their new iPhone-capable networks a year ahead of schedule. The urgency at which both Bell and Telus moved to make this possible offers some great insight into the state of the Canadian mobile phone industry. The most important things that this news highlights:

  • Rogers was cleaning the clocks of its competitors thanks to the iPhone, and that was having a severe impact on the bottom lines of Bell and Telus. There’s no other reason for spending the money required to get their new network up so quickly. The two companies were bleeding subscribers, who were going to Rogers and Fido en masse and signing three-year service contracts. One Rogers insider told me that half of all new Rogers customers were former Bell/Telus customers switching to get the iPhone.
  • The smartphones that Bell and Telus had been bamboozling customers with by lying to telling them they were iPhone equivalents for the last two years (BlackBerry Storm, Samsung Omnia, Palm Pre and a half-dozen others), have been been nothing short of spectacular failures.
  • This is particularly distressing news for the Waterloo, Ontario based maker of the BlackBerry, Research in Motion. I can’t tell you the number of business users I’ve met who are dying to get an iPhone, but are stuck with BlackBerry because their corporate accounts are with Bell. Consumers stuck in long-term contracts will now also have the chance to ditch their App-less phones for Apple’s smash hit.
  • For Rogers, this isn’t the worst news ever, as the iPhone has meant huge phone subsidies and data demands on its network that at times have taxed their system. This gives them some breathing room to increase capacity at a more reasonable pace. They also knew it was coming, as Apple and Rogers have never had an exclusive agreement. Rogers was just lucky Bell and Telus were stuck in the dark ages with their CDMA (iPhone unfriendly) networks.
  • The other huge reason Bell and Telus had to move fast is the impending launch of new competition: Globalive, Shaw, and Videotron will all be launching their own networks as early as this fall. Since all of these new networks will be compatible with the iPhone, Bell and Telus would have been facing an even bigger disaster by waiting until 2010.
  • Canadians rejoice! Bell and Telus have SIM cards!!! Welcome to this century.

Make no mistake, the iPhone is in a league of its own. No one is switching carriers for the Palm Pre or Blackberry Tour. Sprint CEO Dan Hesse, who’s watched his company bleed customers to the iPhone and rival AT&T in the U.S., said it best: “You can almost put the iPhone, to be fair, in a separate category. The Apple brand and that device have done so well… it’s like comparing someone to Michael Jordan.”

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