Canadian auction brings back GSM rumors

Earlier this year, a rumor emerged that Telus was considering a switch to GSM technology. While some consider CDMA a superior technology, GSM would provide the company with a greater foreign roaming service, access to a wider selection of handsets, and an easier transition to 4G technology. Now that we’re getting deep in the Canadian AWS auction, the rumors are picking back up. This time they include Bell.

“If such an announcement were made, we believe it would act as a weight on Telus stock but could also be negative for Rogers as the market continues to fear that company’s eventual loss of its GSM advantage,” [Greg Mac-Donald, National Bank Financial analyst] said.

The switch would not be cheap, said to be in the $500 million range, but could be feasible with the new spectrum. Rogers, though, has the upper hand in the spectrum at the moment, with 19 licenses bid at $713 million.

Will Rogers make a play to block its rivals from making the switch? I suppose that’s one of the fun aspects of having an open auction.

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