After much speculation, Vonage is finally coming to Canada – joining Primus in the VOIP market. Aside from the intriguing geek factor, the prospects for Vonage and other Internet telephony providers is likely limited north of the border because Canada's residential phone prices are so low. This eliminates the marketing tool Vonage has been leveraging in the U.S. where its prices are about 20% to 30% below incumbent carriers. If, for example, you compare Vonage's prices with Sprint Canada, it's a financial wash if you include a package that includes 200 minutes of long-distance service and three calling features. Until the CRTC does away with the price-cap regime, there will be little wiggle room for VOIP players to gain a foothold.
It should also be noted that Vonage's success in the U.S. should be described as modest with 135,000 subscribers. While it's apparently adding 20,000 customers a month, Vonage is a long way from replicating the subscriber growth of emerging high-tech companies such as NetFlix, Tivo and XM Radio. Vonage's real success is its ability to raise US$105 million of venture capital, which talks to the entrepreneurial skills of founder Jeffrey Citron.

Mark Evans
Financial Post
Everyone knows there's no such thing as a free lunch, and Gmail is a perfect example.
Google plans to launch a Web-based e-mail product in a market already dominated by Microsoft Corp.'s Hotmail and Yahoo! Inc.'s Yahoo Mail. To attract consumers and stake out its own distinct turf, Google will provide Gmail users with 1,000 megabytes of storage space — compared with Hotmail's two megabytes and Yahoo's six megabytes.
Most people will not come close to using 1,000 megabytes of storage — unless they want to store hundreds of MP3 songs and thousands of photographs online — but Google needs something to differentiate itself and memory is getting less expensive by the day.
The catch, however, is Google's plan to scan Gmail messages so it can present targeted advertising. People who write e-mails about vacations to Mexico could, for example, see banner ads for Expedia.com or Travelocity. com. Google is trying to address the age-old issue of making ad campaigns more relevant and powerful. The happier advertisers are, the more likely — in theory — they are to continue spending money.
Not surprisingly, the privacy folks are up in arms because they claim Google's scanning plans could lead to abuses. The Electronic Privacy Information Centre has vigorously complained while British-based Privacy International has filed a complaint with authorities.
Give these groups credit for ringing the alarm bells but, frankly, their efforts would be better spent fighting privacy battles elsewhere.
If you are really concerned about privacy, then don't use Gmail and don't send e-mail messages to people with Gmail accounts. It's that simple.
Google has been completely upfront about its Gmail plans. It has made no secret of the fact e-mail messages will be scanned. The way Google figures it, consumers will get a free service with lots of storage and see advertisements that appeal to their specific interests. For advertisers, e-mail becomes a more valuable vehicle with the potential to become as powerful as the search engine market which has become a lucrative business with the use of keyword-based advertising.
For Google, it is a win-win-win proposition. Consumers are happy, advertisers are happy and Google is happy if Gmail turns into another rich revenue source.
Should concerns about privacy be brushed aside? No. As long as Google remains upfront about what it is trying to do, and consumers are willing to “pay” for Gmail, there should be no problems. It is all about disclosure. Let's not forget that DoubleClick Inc. tracks the Web sites that computer users visit so it can do a better job delivering relevant advertising.
If Google discovers there is enough of a consumer backlash about its scanning plans that it attracts fewer Gmail users than anticipated, its plans will likely be quickly modified. The presence of two strong rivals in Hotmail and Yahoo will keep Gmail honest.
And while Gmail, which is apparently being beta tested by 1,000 volunteers, friends and Google family members, has attracted its fair share of buzz and media coverage, Hotmail and Yahoo will have to respond strategically. Look for both rivals to increase the amount of storage they offer, and enhance the premium fee-based e-mail services they offer.
Web-based e-mail is a competitive market with dozens of legitimate choices other than Gmail, Hotmail and Yahoo. At the end of the day, consumers will decide what works best for them. If they don't want Google snooping around their e-mail, Hotmail and Yahoo are high-quality alternatives.
There is no doubt Gmail will attract plenty of users because of the storage bonanza and Google's strong brand.
But its success is not a slam-dunk because when something is free, consumers can be fickle, and privacy might be one of those things that drives them away.
© National Post 2004

If there's a high-tech company on a huge roll right now, it's Research In Motion, which reported that fourth-quarter profits more than doubled, while the number of people using its Blackberry device surpassed one million for the first time. If that wasn't impressive, RIM boosted financial guidance for the first and second quarters of fiscal 2005. After Nokia disappointed the market earlier this week by disclosing its first-quarter sales and earnings will be lower than expected, the wireless industry must have let out of collective sigh of relief with the RIM news. It will be interesting to see how RIM does down the road as Palm's Treo 600, which is a very cool device, starts to gain momentum. My take is that RIM and Treo are now in the market sweetspot – wireless e-mail and Web connectivity – while Nokia is fighting feisty rivals such as Samsung in the telephone market, while struggling to get people excited about its clunky Communicator device.

Is the telecom boom over? It is a legitimate question after Nokia said its first-quarter sales and earnings will be below expectations. While it would be easy to say the telecom sector's rebound was short-lived, a more accurate explanation is that Nokia's rivals are making life more difficult. In Canada, the hot handhelds in the wireless market come from LG, Samsung, AudioVox and Kyocera. Is it a coincidence they're Asian-based manufacturers? No. Don't be surprised if telecom equipment makers such as Cisco, Nortel and Lucent start losing more sales to overseas rivals such as Huawei. With all the “off-shoring” happening and engineers and software developers either staying home or being lured back, it likely that Asia will soon emerge as a new telecom force.

Now that the SEC has gotten itself “formally” involved with Nortel's accounting woes, there is now one sure thing: it's going to be a long, long time before the telecom equipment maker's woes are put behind it. You could take the summer off – as I plan to do – and be assured that Nortel's accounting issues will still be waiting there upon your return. One of the most frustrating aspects is the lack of information being disclosed by Nortel – a situation that will likely get worse with the SEC on the scene. Anyone who says they know what's going on is simply not telling the truth. Personally, I can't wait until Nortel's first-quarter results on April 29. It will be fascinating to see how Nortel can say nothing while saying something…if you catch my drift!

While Canada's carriers and cablecos sit on the VOIP sidelines, Primus Canada continues to push ahead by expanding its service to eight more cities in Ontario and adding 911 service. It is noteworthy Primus also dropped its prices for residential and business customers, which either suggests the service's adoption has been slow or that Primus wants to carve out more market share before rivals such as Vonage, Rogers, Shaw and Bell get into the game.