Wi-Fi threatens carriers’ data revenue: analysts

The dual-mode, Wi-Fi enabled BlackBerry 8820 has been out for several months, but carriers such as Rogers Wireless have not answered the call from consumers, according to the president of another Toronto-based mobile operator.

Despite the media attention attained by Apple’s iPhone, Harmony Mobile CEO Jonathan Richards said the 8820 – the first BlackBerry to offer integrated Wi-Fi – has greater relevance to the RIM-crazed Canadian market than the iPhone does. He added the reason Rogers did not offer the GSM/Wi-Fi enabled device is due to the threat it could pose to its high-value data revenue.

“It would cannibalize its high-value data revenue,” Richards said. “On the BlackBerry side alone, Rogers’s plans start out anywhere from $25 for a couple of MB, to up to $200 for an unlimited plan.” These high data rates, he said, would be wiped out for users connecting on Wi-Fi access points.

The three major wireless carriers — including Bell Mobility, Rogers Wireless and Telus Mobility — declined to comment on this story citing that decisions around specific products – in this case being the BlackBerry 8820 – are considered competitive information.

Rogers’ data rates have been in the media spotlight after the iPhone’s delayed arrival to Canada. The iPhone hits Europe this week, with services plans starting at roughly $70 per month. According to Rogers current data fees, a similar offering would cost its customers at least double that price.

Richards cited Rogers’ third quarter numbers, posted last week, which indicates a 20 per cent year-over-year increase in users, as well as the highest Average Revenue Per User (ARPU) in Canada’s wireless industry.

“If something were to happen to damage Rogers’ ARPU numbers and the revenue goes down, the stock would be degraded and so the money to maintain operations and advertising becomes more expensive to it,” Richards said. “Also, keep in mind the fastest growing portion of operator revenue right now is in the data space.”

According to Richards, Voice over Internet Protocol (VoIP) is becoming more of a key strategy of telephony integration for companies such as Microsoft and RIM. And it appears, he said, that software vendors and carriers are going to continue to butt heads over this issue in the future.

“But, we all know how that worked out the last time it happened and what resulted was the creation of the Internet,” Richards said. “If land-line operators had their choice back in the mid-90s, they would not have permitted the Internet to grow. Now they’re trying to claw back in the whole net neutrality debate, so really the same things could be happening in the wireless space.”

Richards said his company, Harmony Mobile, has been told by a variety of handset vendors, including Nokia, that Rogers wants to avoid VoIP over Wi-Fi right now.

“You will note that Rogers carried the Nokia E62 phone under its Fido brand,” Richards said. “Rogers pressured Nokia to remove the Session Initiation Protocol (SIP) stack and the Wi-Fi radio in its E61 model and basically created a “brain-dead” version of that phone.”

And some analysts like Michael Rozender, an Oakville, Ont.-based consultant who specializes in wireless technology, agree with Richards. He said that for the carriers, it’s a simple case of business before consumer demand for IP telephony. “The carriers, which include Bell, Telus and Rogers, are simply trying to protect themselves,” he said.

Another analyst, Info-Tech Research Group’s Mark Tauschek, agreed, saying that Canadian wireless carriers have dragged their feet in moving toward fixed-mobile convergence. He added the carriers are “scared to death” of FMC, because they don’t want to see their traffic potentially going to another network.

“All those minutes going to your Wi-Fi network at home or at your enterprise’s network are not going over their network, so they can’t charge you for the voice or data usage,” Tauschek said. “And while it’s a real disappointment that carriers haven’t moved faster to fixed mobile convergence or mobile-to-mobile, it’s obvious that they have a lot to lose.”

And Richards said that the blame for Canada’s slowness in FMC should be blamed on the “oligopoly” of carriers in Canada, which includes Bell, Rogers and Telus.

“The thinking right now is, since nobody else is offering dual-mode voice services, why should anybody be the first to do it,” Richards said. “In Rogers’ case, they have a monopoly on GSM and they want to retain that position for as long as they can and they want to control what service features are available on the network.”

Harmony Mobile, which said it is the only “licenced” GSM operator in Canada to offer a dual-mode GSM/Wi-Fi wireless service, hopes to offer the BlackBerry 8820 in the near future. As of now, the company only supports the HP iPAQ 510 Voice Messenger and the Nokia E61/E61i.

Would you recommend this article?


Thanks for taking the time to let us know what you think of this article!
We'd love to hear your opinion about this or any other story you read in our publication.

Jim Love, Chief Content Officer, IT World Canada

Featured Download

Featured Articles

Empowering the hybrid workforce: how technology can build a better employee experience

Across the country, employees from organizations of all sizes expect flexibility...

What’s behind the best customer experience: How to make it real for your business

The best customer experience – the kind that builds businesses and...

Overcoming the obstacles to optimized operations

Network-driven optimization is a top priority for many Canadian business leaders...

Thriving amid Canada’s tech talent shortage

With today’s tight labour market, rising customer demands, fast-evolving cyber threats...

Staying protected and compliant in an evolving IT landscape

Canadian businesses have changed remarkably and quickly over the last few...

Related Tech News

Tech Jobs

Our experienced team of journalists and bloggers bring you engaging in-depth interviews, videos and content targeted to IT professionals and line-of-business executives.

Tech Companies Hiring Right Now