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Summary:

Despite a slow start, the Canadians are finally embracing Internet Telephony. According to Canada.com, the playing field now includes Primus Telecommunications Canada Inc., Comwave Telecom Inc., Vonage Holdings Corp., Nicer Technologies Inc. and BabyTel. Telus Corp., AOL Canada Inc., Saskatchewan Telecommunications Holding Corp. and Yak Communications […]

Despite a slow start, the Canadians are finally embracing Internet Telephony. According to Canada.com, the playing field now includes Primus Telecommunications Canada Inc., Comwave Telecom Inc., Vonage Holdings Corp., Nicer Technologies Inc. and BabyTel. Telus Corp., AOL Canada Inc., Saskatchewan Telecommunications Holding Corp. and Yak Communications Inc. plan to launch services later this year. Telus plans to start offering the service later this year, but the other two biggies, Rogers and Bell Canada have no concrete plans as yet.

“There is not a lot of inertia to push people to look at new alternatives. We’re just spoiled,” Jon Arnold, an analyst with Frost & Sullivan said. “For consumers, price will attract them but I don’t see enough margin for Voice over Internet Protocol providers in Canada to drop prices to get a lot of [customer] migration.”

Given the small size of the market, my feeling is that the Canadian Internet market is going to take a long time developing. The excessive number of players could lead to price wars which is going to cause problems for some, and profit nightmares for the industry in general.

Frost & Sullivan estimates there will be 128,000 Canadian Internet telephony customers by the end of this year; 375,000 in 2005; 713,000 in 2006; 1.15 million in 2007; and 1.58 million in 2008. In the United States, subscriber growth is expect to jump to 1.16 million this year from 100,000 in 2003. By 2008, Frost & Sullivan forecasts there will be 16.5 million subscribers in the United States.

  1. Bell Canada plans to deploy VoIP by 2007. Already VDSL rollout has begun. Rogers plans to have VoIP in the Greater Toronto Area by 2007.

    From what I understand, the Canadian telcos are ahead of the US incumbents in terms of VoIP *and* Video over IP deployment. The US may be ahead in the softphone market, but this is carrier-grade stuff we’re talking about.

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  2. Bryan Pilsworth Sunday, June 27, 2004

    In terms of Video over IP, Canadian ILECs have been front and center. Bell Canada began technology trials Video over VDSL well over 3 years ago with a few apartment buildings in Toronto. Today, Bell is rolling video over DSL commercially using VDSL through remote DSLAM equipped right in multi-dwelling units. Bell Canada is not alone… Sasktel, Aliant and Telus have all been trials with video for sometime.

    What makes Bell Canada unique among RBOCs is that, unlike US RBOCs, Bell owns Telesat (satellite owner/operator), Bell ExpressVu (DTH provider) and Bell Globemedia (TV/print media). Therefore, Bell is better prepared to offer video over IP because Bell already owns all the ingredients to provide content. Having these elements means that Bell can compete head on with the CDN cable cos.

    bp

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