Rogers Communications on Thursday announced its foray into the telecommunications market, with plans of deploying an IP multimedia network to enable voice-over-cable telephony and new voice and data services by mid-2005.
The new services, which will be equally targeted at business and home users, will initially be available to approximately 1.8 million customers, and then to “the vast majority” of Rogers Cable customers by 2006. This is conditional upon regulatory approval.
“It’s an opportunity and an investment whose time has finally come and which we’re now confident carries significant rewards for both our customers and our shareholders,” said Ted Rogers, president and CEO of the company said if the announcement during a teleconference Thursday.
Rogers was mum on specifics such as pricing, saying only that it intended to focus on value for customers through its ability to offer unique bundles or service combinations. Users of the service will be able to switch their existing service to Rogers without having to change their phone numbers, and will have access to popular services such as enhanced emergency 911 service, caller ID and call waiting, the company said. The digital telephone service will use existing cabling, and will connect from each phone jack in a home or office. It will also offer uninterruptible back-up power, according to Rogers.
However, Rogers will not depend on Bell Canada wiring in a home or business, according to Alexander Brock, vice-president, business development for RCI-Technology. “What we do is come into the home and…connect our network to the existing home wiring in the customer’s home. And essentially, all of the extensions that were previously available on the Bell network will become available on ours. So basically everything from the customer’s perspective will run exactly the same way as it did before,” he explained.
Mark Quigley, research director at the Yankee Group Canada said the introduction of more competition in the telecom marketplace is a good thing, and there will be more choice for local telephony service. He said he suspects that Rogers will use price as part of the carrot and stick to get people on board.
“What they’ll probably do is come to the table with a comprehensive bundle of services that will likely include local and long distance,” he said, “and that those services will be discounted and that will be part of the reason that consumers decide to go to one provider over another.”
The challenge from the perspective of the incumbent carrier, or Bell Canada, in today’s marketplace and today’s regulatory regime, is they cannot easily bundle local service with anything but instead have to go through the CRTC to get such things as tariff approval.
According to research from the Yankee Group Canada, a large number of consumers are only willing to switch carriers if they can save money.
“There certainly is a market for an alternative provider to come in and offer services,” Quigley said. “At the same time, it can be assured that Bell is going to fight hard to maintain their share of those customers.”
Quigley said the timing of announcement has allowed Bell some time to plan its next move and decide on what bundles or services itcan offer in the future, to remain competitive.
“At the end of the day it’s all going to be about presenting stuff that the consumer looks at and sees definite value in,” Quigley explained. “People aren’t just going to jump for the sake of jumping, there’s going to have to be some type of value proposition presented to them.”
Rogers is not the only cable company to get into the telephony game. Calgary-based Shaw Communications last week announced that it had registered with the Canadian Radio-television and Telecommunications Commission (CRTC) as a competitive local exchange carrier (CLEC), marking its move closer towards offering telephony services. In a statement issued by Shaw, the company explained that CLEC status would enable it to interconnect with incumbent telephone companies and long distance providers on an equal basis. The company will also be able to provide local number portability, access to new telephone numbers, emergency 911 service along with other traditional telephony functions. These would include services such as caller ID, call waiting and call forwarding.
