Videotron's VOIP pricing strategy
Just when you thought all the cablecos had decided to go down the premium-pricing path, Videotron has thrown the market a change-up. The company became the first cableco in Canada to roll out an IP-based telephony service that starts at $15.95 a month. What's different about the service is its a la carte menu where customers can add individual features for a monthly fee. The first service costs $4 a month while additional services are $2 a month. There's also a $4.95 a month plan for LD within Quebec.
Give Videotron credit for trying a different approach, which appears in some ways to be a hybrid between the premium offerings of Comcast, and the discount deals at Vonage, Primus, AT&T, Yak, etc. My take is that Videotron management realizes price will be a key factor if it wants to win market share against Bell Canada, as well as its Internet telephony rivals.
As for Videotron customers, if you already use the company's high-speed Internet and cable-TV services, it's a no-brainer to sign up for the telephony service. The fact Videotron offers free installation that lets you use your in-house wiring, and you get to keep your phone number makes its service difficult to resist. Bell Canada has much to worry about.
January 24th, 2005 at 4:13 pm
Hey Mark - great blog. I think you are way up there in terms of VoIP knowledge compared to most who write about it. Nice to get such a focussed Canadian perspective as well.
The Videotron pricing is interesting to see. I'm surprised that any VoIP providers are putting out packages that do not include a suite of “free” services such as VoIP, etc. They cost nothing (other than one-time NRE for the software to enable the service).
FYI, I use Vonage Canada and have been a customer since they launched service in Canada. It's been pretty smooth. I use it for all my LD calling and since I have a 613 area code (Ottawa), all my friends in Ottawa can call me locally, for free. Very handy for $20/month.
I think that with prices like $15.95 at Videotron or $20 at Vonage, people with teenage kids are going to seriously consider getting second lines just to make life easier. So as much as VoIP could hurt the incumbents because prices will drop, I wonder if it won't be AS bad as we think because some folks will take another line? (of course now every kid has a cellphone so maybe that kills my logic!)
Another side note: I think of Vonage as a great catalyst. They show everyone what VoIP can do, they price it well, they create lots of buzz (and happy customers), and the cable guys go after the business bigtime. But, would I get rid of my Bell line yet? No. The quality isn't good enough yet. For example I was downloading some stuff with Bit Torrent and it caused a *3 second* time lag on the voice connection. Seriously - form the mental picture of me holding a Bell line to one ear and a Vonage line to the other and talking to myself. But, when a service provider like Bell or Rogers or whoever is able to “control the last mile” and offer quality of service (priority to voice packets), that shouldn't happen. And it looks like Vonage can't offer that quality. So bundles should rule, and Vonage should struggle over time.
Just some thoughs to consider. Keep up the awesome blog work.
Chris Umiastowski
January 26th, 2005 at 6:00 pm
I have already gotten rid of Bell and use Vonage as my primary line. If it goes down it is no big whoop - it will forward to my cell phone. Same thing with power and 911 - we have 2 cell phones in the house so we have a backup.
QoS is becoming less of an issue as most routers have this and it is becoming easier to use. You will soon be able to buy a router with a built in VoIP ATA from companies such as Linksys which should make things even better.