The Outlook For Canada's VOIP Market

The Seaboard Group have put together another insightful and entertaining report on the Canadian VOIP market called “Top of the First – the VoIP battle begins”. So what's the bottom line? Seaboard expects there will be 4.02 million VOIP lines by 2008, compared with 418K by the end of 2005. In terms of dollars, the market in three years will be worth about $1 billion, or 5% of the total voice business, as intense competition drives down prices. So what should carriers do stay vibrant in the voice market? Seaboard advises them to “fight fire with fire” by rolling out VOIP services that exploit the weaknesses of cablecos products. Seaboard points out that a vulnerable area for the cablecos is the lack of value-added features. Videotron Ltee, for example, has attracted 62K customers in the past six months even though it is offering a low-frills service. Then again, selling VOIP for as low as $15.95 a month helps the sales effort, and Seaboard expects the cableco to have 125K customers by the end of 2005. The research firm suggests the cablecos stay on the offensive as it will be more difficult for Bell/Telus to win back customers than it will be for the cablecos to win them in the first place. As for the independents such as Vonage and Primus, Seaboard believes it will be more difficult for them to compete. As a result, they need to keep on the marketing warpath and show consumers they can be innovative, flexible and adaptible.