With the Canadian government intent on de-regulating the country's $10-billion local telephone market and giving the incumbent carriers the freedom to set their own prices, it will be interesting to see the impact this decision will have on Canada's VoIP marketplace. To be perfectly frank, VoIP hasn't been overly successful in Canada. By this, I mean Real VoIP with all the bells and whistles that a Web-based service can offer. What Videotron and Rogers are offering right now is VoIP-lite because it's just plain old telephone service (POTS) with none of the online frills such as voice-mail to e-mail that rivals such as Vonage, Primus and BabyTel are offering.
Perhaps the reason the cablecos haven't rolled out the value-added features that makes VoIP such a compelling proposition is they haven't been compelled to do it yet. With the carriers being regulated in the local market and an unwillingness to become more aggressive with VoIP until the rules became more clear, the cablecos have been able to get away being an alternative option to attract consumers. In Quebec, Videotron has used ultra-low prices if you have a multi-service bundle, while Rogers and Shaw have been content to pick off customers pissed off with Bell and Telus respectively.
But what happens if Bell and Telus suddenly get more aggressive with their phone prices (both traditional and VoIP) to win back customers who may have strayed to the cablecos, Vonage, etc.? And what happens if Bell really starts to push Bell Digital Voice as a premium, multi-feature VoIP service, while cutting prices on traditional local service? This could become a strategic conundrum for the cablecos because they would have to determine whether to compete on price against traditional service, which looks and smells the same as cable telephone service provided by Rogers and Videotron. Or do the cablecos go upstream and go head to head with Bell Digital Voice by adding all the Web-based features of Real VoIP.
If I had to guess, the cablecos will go the premium route because it fits into their focus/obsession with disciplined pricing and ARPU. If this materializes, it would be terrific for VoIP and customers who want Real VoIP because the cablecos and carriers will have to compete on features and services - much like they do in the high-speed Internet access market where both sides are intent to increase speed and add more features as opposed to - heaven forbid! - drop prices.
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