Videotron, the premier player in Quebec broadband Internet and home television service, has announced that they will soon launch a mobile phone service division. Videotron also holds a sizable percentage of the Quebec’s home phone service contracts.
Videotron’s foray into wireless phones, the first time a major cable company has done so since Rogers 25 years ago, will initiate a direct competition with Bell. Since Bell, the premier phone company in Quebec, is based in Montreal and derives one third of their profits from the province, the competition is bound to be fierce.
Five years ago, the current battlefield was just being prepared when Videotron launched home phone service in Quebec, bundling services to steal hundreds of thousands of customers from Bell. Today, Bell owns about 60% of the home phone contracts in the province, while Videotron holds just over 32%.
Beyond Quebec, the upcoming competition between Videotron and Bell foretells things that are bound to come. As barriers to entry fall, a result of government competition rules and technological advancements, more companies can offer a wider range of services to a wider area of consumers. As supply increases, the players will have to climb over each other to capitalize on existing demand.
The end goal for the telecom players in these competitions is, in their own words, to “own the home.” By bundling the four big services – Internet, Cable, Phone, Mobile – a single company can capture all the revenue of a single household. Bundling all the services also makes it much less likely that a client will switch providers.
Because the service offerings between the existing companies is increasingly similar, home and corporate clients alike can expect these competitions to revolve mostly around price. According to analysts this will apply in Quebec, as it did when Videotron first released its home phone service at a fraction of the cost of Bell, as well as around the country.
“Given the environment that we’re in right now, and the pricing, it would be unbelievable if Vidéotron didn’t come out with the same type of radical price undercutting [as before],” said Brahm Eiley of Convergence Consulting Group Ltd. to the Globe and Mail.
For our part, we will keep an eye on this and other competitions for customers in Quebec and beyond. For customers with questions about new wireless phone service options, please call our offices in Montreal at 514.228.1431. You can also reach us with questions 24 hours a day through our website’s Contact SE Telecom page.
This entry was posted on Monday, August 30th, 2010 at 4:05 pm and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
I’m assuming that Bell is just a portion of AT&T? If so, I didn’t know that they had that large of a market share in other parts of the world. It’s very interesting to hear about cellphone drama in other parts of the world.