It looks like Shaw Communications will be the first Canadian cableco to launch an Internet telephony service using VOIP-based technology. At the company's AGM yesterday, CEO Jim Shaw said customers in Edmonton will be offered the service within a few weeks. The service will cost about $60 a month and include 1000 minutes of long-distance and four calling features - similar to what Mr. Shaw said a year ago. The company believes it can win 20% of the telephony market within the next four to five years. It expects to spend $105-million in capital for the first 200,000 customers, and $200-million to $250-million over five years.
Like Comcast earlier this week, Shaw is adopting a premium price approach to Internet telephony. At $60, I have serious doubts they will be able to achieve the market share gains management has targeted. Using traditional service now, even if you use plenty of LD and lots of features, $60 represents a hefty monthly bill. Does it really make sense to switch over to a cableco if the price difference is minimal?