Call-Net and Microcell own up to partnership rumour

Proving that sometimes rumours come true, mobile communications company Microcell Telecommunications Inc. is teaming up with Call-Net Enterprises Inc. to create a wireless-and-wireline service package for Canadian customers.

The firms on Thursday announced the deal, which would see Call-Net’s subsidiary Sprint Canada Inc. market Microcell’s “Fido” mobile phones and services alongside its own local and long-distance wireline phone service.

The firms said Toronto-based Sprint would act as the primary contact for customers that choose this bundled package, which includes wireless service, wireline local and long-distance service all on one monthly bill. Sprint will take on the sales, marketing, customer support, billing and payment aspects of the deal. Microcell, headquartered in Montreal, will provide technical support.

The agreement follows rumours that Call-Net would partner with Microcell to provide a combined wireline-wireless package. Industry analysts have said such a deal would make sense for both parties: Microcell would win a wireline ally, something it lacked in the past. Sprint, meanwhile, would win a wireless partner, something it needs to provide full-service telecommunications to its customers.

“If you look at [Microcell’s] competitors, they have comprehensive wireline-cable-DSL to offer,” said Warren Chaisatien, telecom industry analyst with IDC Canada Ltd. in Toronto. “Microcell is a standalone wireless carrier, the smallest. Anything that could enhance its offerings would be good – especially Sprint Canada, which is a consumer-focused telecom business.”

However, the move is somewhat odd for Call-Net, in that its namesake south of the border, Sprint, operates a wireless service on technology that is markedly different from that of Microcell. Sprint uses Code Division Multiple Access (CDMA) technology while Microcell operates on a Global System for Mobile communications (GSM) network; the networks do not work together.

This could be a problem for Call-Net, said Brian Sharwood, an analyst with SeaBoard Group Inc., pointing out that “you don’t want to tell the U.S. people that are heavily committed to CDMA that you’re going too far down this road (toward GSM). They’d probably start grumbling at some point.”

Bill Linton, Sprint Canada’s CEO, explained that the technology is no stumbling block, saying the service is “absolutely tied to our local service.” The company will not market wireless for roaming to the U.S. Still, Alain Rh