Proving that sometimes rumours bear fruit, 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 in June 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 companies said Toronto-based Sprint would act as the primary contact for customers choosing 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.
Bill Linton, Sprint Canada’s CEO, said Call-Net would market primarily to the residential consumer market in the first place, but if the packages prove successful, the firm might offer similar bundles to businesses. Call-Net will describe prices and terms in the fall, when the packages come to market.
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 a Code Division Multiple Access (CDMA) network while Microcell operates on a Global System for Mobile communication (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.”
Sprint’s Linton said the technology is no stumbling block.
“This is a product that’s absolutely tied to our local service. We are not going to be talking about or advertising as a great benefit the roaming capability of this service. This is much more of a local extension. We will be using Microcell and Fido’s current international partners if that’s required. Sprint PCS is not one of those, but we don’t see any issue with confusion.”