New wireless entrants look to U.S. carrier for AWS-compatible iPhone 4

Canada’s new wireless entrants could offer the popular iPhone 4 if American carrier T-Mobile can convince Apple Inc. to create a version of the device that functions on their networks--but analysts say new entrants won’t necessarily want to carry the handset. The iPhone 4 will be Apple’s first smart phone to be immediately available with Canada’s three incumbent wireless carriers, Rogers Communications Inc., Telus Corp. and Bell Canada, when it is launched Friday. “I don’t think there’s a competitive advantage between Bell, Telus and Rogers when it comes to the iPhone,” Dvai Ghose, a telecom analyst with Canaccord Genuity, told The Wire Report. But the smart phone will not be compatible with new entrants Wind Mobile and Mobilicity’s networks. It also won’t work on the coming wireless networks of cable giants Videotron Ltd. and Shaw Communications Inc., which are launching their services on the iPhone-incompatible AWS band. “Apple has not yet announced plans for an iPhone that operates on our AWS frequency band, but we will continue to seek partnerships to bring the latest in handset innovation to our community,” Ken Campbell, the CEO of new entrant Wind Mobile, said in an emailed statement to The Wire Report. If the new entrants want to carry the iPhone 4, their hopes may lie with American wireless carrier T-Mobile. In the United States, the iPhone is only available with AT&T, but Ghose said it’s likely that T-Mobile, which also uses the AWS band, could work toward the development of an iPhone that is compatible with its network. “I think it’s just a matter of time,” Ghose said. Analysts note that Canada’s wireless market is too small to convince Apple to design an AWS-compatible iPhone. “The Canadian market is too small for anyone to focus on, except for our Canadian companies,” Iain Grant, a communications industry analyst with the SeaBoard Group, said in an interview. “The number of phones you can move in India sort of dwarves the number of phones moved in Canada over the last 30 years.” When T-Mobile started carrying Research in Motion’s BlackBerry Bold 9700, the device quickly became available for Canada's new entrants. But Ghose said the new entrants are focused on customers who would not necessarily want or need an iPhone. “I think the majority of customers they are looking for are not necessarily iPhone customers,” Ghose said. “You buy the iPhone for data usage. The biggest weakness in the offerings of the new entrants is they don’t have ubiquitous networks.” Public Mobile, which paid $50 million for spectrum in the less advanced G-block frequency, has shifted its focus away from the smart phone market. “Smart phones aren’t something that we’re immediately considering,” Lisa Papas, a Public Mobile spokeswoman, said. “It’s such a different marketplace. We’re not really competing with the iPhone customers. Those are people who are more affluent, have more dollars and are less concerned about their bill at the end of the month.” Analysts expect the iPhone 4 to do very well in Canada, despite some reception issues when the phone's exterior antenna comes into contact with the user's hand. Apple is offering full refunds or free phone covers--called "bumpers"--that prevent contact with the antenna. Ghose noted that Rogers customers who bought the first iPhone in 2008 could qualify for a hardware upgrade and get a subsidized version of the newest model. He also said an unlocked version of the iPhone 4—which will retail at $659 for the 16-gigabyte (GB) version, and $779 for the 32-GB version—could do well in Canada, despite the lacklustre initial sales performance of the unlocked Google Nexus One. “Over a period of time that Nexus One model will become more popular,” Ghose said. Google Inc. sold its Nexus One phone directly on its website, but recently abandoned the online store. But the Nexus One didn’t have the iPhone’s mass appeal, Ghose said. He said the iPhone could be the device that switches the tide on buying unlocked devices, which allow consumers to shop around for wireless packages and facilitate international roaming by changing the Subscriber Identity Module (SIM) card. But Grant said Canadians will want to stick with multiple-year contracts with the iPhone 4. “Canadians have always tended to like a lower entry point and are prepared to trade off certain freedoms for that. We are the only country, for example, which has three-year contracts,” he said. Rogers and Bell told The Wire Report they will comment on the iPhone 4 when it becomes available Friday. jmigneault@thewirereport.ca

New wireless entrants look to U.S. carrier for AWS-compatible iPhone 4

News | July 26, 2010

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