Wednesday, July 06, 2005

Videotron's VOIP Growth

Mark Evans

Videotron - perhaps the most aggressive cable telephony service provider in North America - has attracted 42K customers since February. Videotron's success is not a surprise given its prices ($15.95 to $29.95, not including LD) make cable telephony service a no-brainer, particularly if you're already a cable and high-speed Internet subscriber. Concius Capital analyst Kona Shio expects that Videotron will have 90K telephony users by the end of this year. You wonder how Bell will respond to losing serious market share. Given Videotron's telephone service has few bells and whistles other than low prices, perhaps Videotron's picking up customers who just like bundles - something Bell has embraced as well. The real challenge for Bell is making sure its own customers, who buy two or more services, don't jump to Videotron. Losing them would means losing lucrative customers. Another way of looking at Videtron's success is it could accelerate the de-regulation of the local phone market in Montreal. Then, Bell could really start to compete on price and promotions.


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