Shaw unleashes new phone service to rival telus – doc.


Tuesday, February 15th, 2005

‘Triple-play’ package offered in Calgary includes high-speed Internet, television

Tamara Gignac
Sun

 

CREDIT: Jeff Mcintosh, Canadian Press

Jim Shaw, CEO of Shaw Communications, uses one of the company’s new Shaw digital phones, an internet based residential phone service in Calgary.

Shaw Communications Inc. launched a phone service Monday, pitting it against Telus Corp. in a bid to capture part of the coveted Western Canadian phone market.

The service, which allows consumers to make calls using the Internet, will be available today in Calgary and will be rolled out gradually over the next year in other major Western Canadian cities.

The move kicks off a new era of competition with Telus in its traditional Western Canadian market, allowing Shaw to offer a “triple-play” package of services that includes high-speed Internet, local telephony and television.

“Technology is changing. We’re not just cable guys anymore — in fact we haven’t been cable guys for quite some time,” chief executive Jim Shaw said.

The product includes a local phone line, unlimited long-distance calling anywhere in North America and features such as voice mail and call forwarding. It costs $55 a month if bundled with other Shaw offerings, and customers keep their existing phone number and use a traditional handset.

Dubbed Voice-over-Internet Protocol, or VoIP, the technology digitizes voices and encodes them into packets of data over a cable network. It does not interfere with your ability to watch TV or surf the Internet, and calls can be made to any regular phone regardless of who the carrier is at the other end.

Telus — planning to launch TV service in the near future — is well-prepared for Shaw’s foray into telephony, said spokesman Nick Culo. “People have been counting on Telus to connect them to family and friends for more than 100 years or so. If asked, I think most would have a hard time remembering when they last picked up their phone and didn’t get a dial tone.”

Shaw president Peter Bissonnette said that unlike some VoIP providers, reliability of service is not an issue. “We have systems in place for any kind of potential causes for service interruption, including power concerns,” he said.

Shaw is the second major cable provider to launch a digital telephone product. Last month, Montreal-based Videotron Ltee launched a similar service in Quebec, aggressively targeting Bell Canada‘s market with basic service for as low as $15.95 a month.

While promising, Shaw’s offer is unlikely to strike a chord with price-conscious consumers, said Iain Grant of telecom consultancy SeaBoard Group, noting that new VoIP entrant Vonage Canada sells its package for half the price and includes a unified messaging feature.

“Does the product make sense? Yes it does,” said Grant. “[But] I wouldn’t be surprised to see Shaw reposition it with different options and price points by the back-to-school season in September,” he said.

The Calgary-based firm, which spent $50 million to roll out the technology, said it will not slash fees to lure clients from Telus. “It’s not a low-dollar proposition, it’s a fully featured service where if you want to call New York, you can anytime you want,” Shaw said. “We’re not expecting everyone to turn over to this.”

Smaller regions, which in the past have had little alternative to Telus for phone service, will be attractive markets, added Shaw.

Shaw’s Class B shares closed Monday on the Toronto Stock Exchange at $22.68, up 53 cents.

Telus shares closed at $37.10, up 90 cents or 2.49 per cent.

PHONE WARS:

Shaw Communications new phone service takes direct aim at Burnaby-based Telus Corp. Here’s how the two companies compare:

Telus:

$13.06 billion market cap

4.8 million network access lines

3.8 million wireless customers

Shaw:

$5.23 billion market cap

3 million customers

© The Vancouver Sun 2005



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