I just had a sneak peek at a new phone that is being custom developed for one of the Canadian cellular service providers for launch this summer.

The phone features the Fastap keyboard from Digit Wireless and appears to be based on a phone introduced by ZTE at CTIA in March.

The prototype of the phone is loaded with every feature you can imagine: built-in GPS, camera with flash, FM radio, music player, mobile-TV, video player, memory expansion, EVDO, web browser, speakerphone.

It is a flip phone form factor with mini-USB for connecting to your computer and charging.

I understand that the phone is being tested now. Will it be in stores before the iPhone?

Who says the Canadian market is too small for custom development? Isn’t this kind of innovation another important measure of a competitive market?

My blog post last week about the OECD’s broadband rankings led to some interesting discussions – some using the blog comments and others who communicated the old fashioned way – by phone.

A couple folks commented on the difference in price between broadband in the city and that offered by rural alternatives. It comes down to a question of redistribution of money: Is it fair for someone in rural Canada to have to pay more for slower speeds than what is available in the city?

This is a question of government policy. I have my own views, in part prejudiced by the fact that I personally chose to pay a lot more to live close to all sorts of conveniences: arts, sporting and cultural facilities, shopping, internet. Not everyone in rural Canada is impoverished – not by a long shot. It is an insult to equate “rural” with “impecunious”. Not everyone in the city can afford traditional supplier rates for broadband.

Should others pay to provide rural Canadians with urban prices and services for broadband, with subsidies based solely on a rural designation? Should connectivity to multi-million dollar cottages be the beneficiaries of subsidies?

Why would we stop with broadband services? I noticed that milk and other groceries are more expensive outside the city. Mind you, I have noticed that the LCBO charges the same for liquor in Keewatin as it does in Toronto. Of course, you may need to travel to Thunder Bay to find a decent Vintages selection. It is interesting to see the products for which we believe in levelling prices.

In the meantime, the CRTC has signalled in this week’s price cap decision that it is ready for rural telephone rates to move upward toward covering the costs.

I’m still waiting to see how Ontario moves forward with its budget statements to extend broadband into rural and northern communities. Maybe the best approach to stimulate broadband adoption is through an income based tax credit – independent of where people live.

MTS Allstream is getting frustrated with the glacial pace of compliance with the CRTC’s orders (Order numbers 2007-20 to 25) to introduce tariff elements for various next generation access services – such as ethernet, wholesale ADSL, etc.

The Commission determines that the incumbent local exchange carriers (ILECs) shall provide to competitors, as part of their Ethernet services, an Ethernet access service, together with the Ethernet transport service and the Ethernet central office (CO) connecting link service.

That is the current law of the land. The CRTC’s orders were issued on January 25 and I wrote about them that week. At the time, I noted

There is an underlying subtext that needs to be explored at another time. The CRTC found that wholesale ethernet and ADSL are non-essential services, yet the Commission is imposing rates and terms that differ from those initially proposed by the ILECs. Contrast this to the Minister’s direction that requires the CRTC to determine the extent to which regulation of non-essential services should be phased out.

Bell, Bell Aliant, Sasktel and TELUS appealed the Orders [in 5 separate review and vary applications], but the CRTC has not yet granted a stay. The January CRTC Orders required these new service elements to be tariffed within 25 days – as in mid-February.

An order was issued – actually, 6 orders were issued – and until they are stayed or overturned, one would think that there should be compliance. Since no stay has been granted, MTS Allstream has now filed a letter with the CRTC asking for it to enforce its orders, if necessary by registering the orders with the Federal Court.

That would turn up the heat on those tariff filings, since people tend to be more concerned about failure to comply with court orders.

Interesting watching.

Last week, I mentioned a report by Kazam Technologies that was delivered in April 2006 but has only recently been released by Industry Canada.

According to the report, the Canadian wireless telecommunications market is expected to generate over CAN$15B by 2009, representing an 11.5% growth rates from 2005 to 2009. The report expects that, at that rate, the Canadian wireless market will grow at a faster pace than the US, forecasted at 10 percent.

An interesting point in the report, which was also cited at last week’s CWTA forum, is that Canada’s cost of acquisition (which includes handset subsidies) is among the highest in the world: 75% higher than the US. As a result, it is misleading to only look at per minute rates in determining the affordability of services and the competitiveness of the Canadian market.

Operators are faced with the difficult dilemma of reducing handset subsidies (to offset their cost of doing business) vs. driving adoption of new services, such as Mobile TV, that require users to upgrade handsets.

This report is hardly the last word on wireless – first round comments for the auction rules are due toward the end of May, with reply comments due in late June. We have scheduled a session looking at competition in wireless services at The 2007 Canadian Telecom Summit on June 13.

Rogers released its first quarter numbers after the markets closed last night. Net additions, data consumption, ARPU were all strong and churn was significantly better than the prior year. Rogers President and COO, Nadir Mohamed, will be delivering the opening keynote at The 2007 Canadian Telecom Summit on June 11.

Bell’s results are out this morning and are showing continued challenges in the wireless segment. Net additions on post-paid accounts were only a tenth of what Rogers gained. TELUS results are out later today – watch this space for updates.

Update: [May 2, 11:15 am]
TELUS has released its numbers and it has added 6 postpaid wireless customers for every one that Bell captured – leaving it with a total number of customers (4.136M) just shy of Bell’s (4.254M). At the current pace, TELUS will catch up to Bell in 2 more quarters. Rogers has 5.493M postpaid subscribers. The 3 major carriers added about 165,000 customers in the first quarter: Rogers grabbed 57% of them, TELUS 37% and Bell just 6%.

What will this mean for consumers in the coming months?