http://tinyurl.com/94g4j (Globe & Mail) Rogers fires up VoIP race with Toronto offensive
By CATHERINE MCLEAN Monday, June 27, 2005 Updated at 11:11 PM EDT >From Tuesday's Globe and Mail What are Ted Rogers' plans for the Canada Day weekend? Likely setting off fireworks in his rivalry with Bell Canada by launching a new digital telephone service. The 72-year-old chief executive officer of Rogers Communications Inc. has said July 1 is his preferred date to introduce a local phone service. It marks the 20th anniversary of Rogers' wireless business, which has leapfrogged the phone giant to become the biggest player in the industry. The new digital service is expected to be launched in Toronto, the company's home base and biggest market. The so-called voice over Internet protocol (VoIP) phone service gives Rogers a new product to sell to its cable-TV, wireless and high-speed Internet customers. "I think Rogers potentially will have a very successful launch," said UBS Canada Securities analyst Jeffrey Fan. "The market is ready for a significant alternative provider." Rogers Cable spokeswoman Taanta Gupta would only confirm a mid-year date for the introduction of the local phone service. More details could be revealed on Wednesday, when the company holds its annual shareholders meeting. The move will also place Rogers on the path toward a fierce head-to-head battle with Bell for consumers' homes as they compete to sell them bundles of Internet, TV, wireless and wireline phone services. Rogers needs a reliable product with no hiccups in service and billing to win over customers, Mr. Fan said. With the new service, Mr. Rogers will realize his goal of becoming a player in both the phone and entertainment markets. In preparation over the past year, the country's biggest cable-TV operator has bulked up its presence in the phone market with two acquisitions that took the market by surprise; the purchase of Microcell Telecommunications Inc. last year, followed up by a bid for Call-Net Enterprises Inc. this year. Call-Net shareholders will also vote on Wednesday on whether to accept Rogers' bid. Rogers is the last of the country's four big cable-TV providers to take the plunge. Vidéotron Ltée was the first in January, followed by Shaw Communications Inc. in February, and Cogeco Cable Inc. this month. So far, it appears cable-TV firms are making steady inroads into the phone market. Vidéotron, the only one to release subscriber numbers so far, said it had won 23,000 clients last month, and that it was scrambling to keep up with the demand. Like Vidéotron, Rogers will be competing with Bell. And Bell, which already has a satellite-TV service, is planning to challenge their control over the TV market. It is spending $1.2-billion through 2008 to install more fibre in its network in order to deliver TV service over phone wires. (Bell is a unit of BCE Inc., which controls Bell Globemedia, the owner of The Globe and Mail.) Pricing for these VoIP phone services has been all over the map, but analysts are predicting Rogers' rates won't be overly aggressive. National Bank Financial analyst Greg MacDonald expects it will be priced above $40. "It's a good bet that it won't be aggressively priced in the $30s," Mr. MacDonald said. There has been some important pricing changes in the residential phone market recently. Rogers is dropping its $5 monthly plan for 1,000 minutes worth of long-distance calls in Canada and the United States as of July 1, according to Ms. Gupta. The company used an outside supplier for the service. Existing customers will be grandfathered. The move mirrors an announcement last week from Bell that it would remove its $5 long-distance plan from the market next month, an action that analysts said would help ease pricing pressure in the market. When Bell introduced the plan a year ago, Rogers followed. "We believe in rational pricing," Ms. Gupta said. "We balance that with what the market offers." -- | The Ontario Asterisk & Voice-over-IP Enthusiasts Group | Join by visiting http://uc.org/asterisk, or by sending email to | [EMAIL PROTECTED]
