The increasing convergence between television and phone services has been made more apparent this week, with Shaw and Telus coming up with new ways to steal customers from each other in BC.
Shaw has recently started its own digital phone VoIP service, which offers unlimited local and long distance calling at a cost of $55. Although somewhat expensive for a VoIP offering, Shaw uses their existing brand name to inspire trust, and targets customers who spend a lot of money on long distance calls.
Shaw has already recruited 90,000 digital phone customers across Canada, and has recently announced that they are expanding into the huge market of Vancouver, BC. Merrill Lynch estimates that the service will steal 150,000 customer from Telus over the next year.
Telus, meanwhile, is trying to pull of a similar trick against Shaw Cable, by launching a satellite television service in Edmonton and Calgary late last year. They plan to launch a similar offering for Vancouver and the Fraser Valley by the summer.
Ultimately, both companies will end up in direct competition with each other over the same market. Most customers will end up choosing one or the other as their exclusive provider, in order to save money by bundling services.
At this point it is difficult to tell whether this trend of market convergence will cause one company to become dominant over the other, or if it will simply result in a gradual reshuffling of subscribers. If the later happens, customers will likely benefit from the increased level of choice and potential for pricing competition.
(Originally published by TeleClick.ca on January 12, 2006)
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