Carriers shouldn’t rush to LTE, says Telus CEO

Telus Corp. won’t be rushed into upgrading its wireless network to the next generation LTE technology until it has got some return from its just completed HSPA+ network, says the head of the company.

“I think it’s presumptuous to talk about deploying LTE when we’ve not yet deployed HSPA+ handsets,” CEO Darren Entwistle told reporters Wednesday.

In fact, he said, there aren’t any LTE handsets available on the market yet.

Entwistle was responding to a question about Shaw Communications Inc, which last month it’s looking at skipping HSPA+ and going to bleeding edge LTE for the wireless network it plans to deploy at the end of next year.

He didn’t address Calgary-based Shaw directly, but he made it clear he thinks it would be premature, if not reckless to get into a technology war.

Considering that most wireless carriers in the country have brand new HSPA+ networks, he said, “I think it would be a good idea to say ‘OK, we’ve made the moves on the technology front, now lets focus on products, services, applications – lets get a return on the capital investment we just made. I think that would be the responsible way for our industry to behave.”

That way, he said, carriers “could get a decent return on the investment that we’ve made. Once we do that, then you can start looking judiciously to the next investment you’re going to make on the technology front.”

LTE offers the promise of download speeds of up to 100 Megabits per second under ideal conditions, compared to the 21 Mbps under ideal conditions for HSPA+. However, LTE telecommunications equipment makers believe HPSA+ can be upgraded to at least 80 Mpbs.

The fact that at the moment there may only be USB data sticks for LTE networks hasn’t stopped three U.S. carriers from preparing new LTE networks, two of which could launch at the end of this year. Some of those networks will be on the 700 Mhz band, spectrum which the U.S. carriers bought in 2008. Industry Canada has yet to auction off the 700 Mhz band here yet.

Again without mentioning Shaw, whose spectrum is in the AWS 1900 Mhz band, McFarlane said building an LTE network on AWS “is quite an expensive proposition.”

It isn’t known if Shaw is serious or bluffing on LTE. But Entwistle stressed that when Telus and Bell made a deal with network equipment suppliers Nokia Siemens Networks and Huawei to build their shared HSPA+ network the price included an upgrade path to LTE.

Also during the press conference CFO Bob McFarlane suggested Telus has no worries about new wireless entrants such as Wind Mobile, which launched in December and is expected to open stores in Vancouver shortly, Mobilicity or Shaw.

Unlike Wind, which only offers no-contract service, Telus has a wide range of offerings, he said.

Noting that 30 per cent of Canadians don’t have cellphones or wireless data service, that should be the target market of the startups, he said. It would be a “suboptimal” business plan for the startups to go after the 70 per cent of the market largely held by incumbents., McFarlane added.

Companies like Telus, Shaw, Bell and Rogers have an advantage over other wireless companies – the ability to offer wireless bundled with other services such as voice over Internet (VoIP), cable or Internet televison and satellite TV. But that advantage only is good for the areas where they have a wireline base. But Rogers, Bell and Telus sell wireless across the country.

Asked how Telus will compete in wireless outside of its home territory of B.C. and Alberta, Entwistle touted the recently launched its Internet-based Telus TV, which runs on a Microsoft platform. The opportunity to leverage that to offer TV over Windows Mobile-based handsets “is huge,” he said.

The press conference was held after Telus’ annual general meeting, where its first quarter results were also announced.

The company said it pulled in $2.375 billion, unchanged from the same period a year ago. Four per cent growth in both wireless revenue and wireline data revenue offset the continued decline in traditional voice services.

Net income for the quarter was $268 million, up 2.5 per cent.

The number of wireless subscribers jumped 6.4 per cent increase.

 



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