Voip Competition Update
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Attachment 2 Page 1 of 19 VOIP COMPETITION UPDATE April 2006 Attachment 2 Page 1 of 19 VoIP COMPETITION UPDATE April 2006 This document provides an update on VoIP competitors now operating in Canada and of analysts' forecasts of VoIP Penetration Figure 1 VoIP Forecasts Available in March 2006 (% of Canadian Households that will subscribe to VoIP from the Companies' Competitors) 25.0% NBI/Michael Sone Merrill Lynch 20.0% Seaboard Group 15.0% 10.0% 5.0% 0.0% 2006 2007 2008 2009 Table 1 VoIP Forecasts (% of Canadian Households that will subscribe to VoIP from the Companies' Competitors (N1)) Forecasts Available in March 2006 Forecasts Available in July 2005 2006 2007 2008 2009 2006 2007 2008 2009 NBI/Michael Sone (N2) 8.7% 13.0% 17.2% NBI/Michael Sone (N3) 3.3% 6.5% Merrill Lynch (N4) 9.4% 14.6% 18.9% 22.9% Merrill Lynch (N5) 7.1% 11.3% 14.6% 17.7% SeaBoard Group (N6) 7.2% 13.0% 20.5% SeaBoard Group (N7) 3.8% 8.3% 13.4% 18.4% Lemay-Yates not available Lemay-Yates (N8) 4.3% 6.9% 10.2% 13.4% Consensus 8.4% 13.5% 18.9% 22.9% Consensus 4.6% 8.3% 12.7% 16.5% N1: The data referenced in the table is calculated by dividing each VOIP forecast, excluding the potential take-up from the ILEC VoIP services, by the forecast of Canadian households from L.Surtees, Still More & Faster: Canadian Broadband Internet Access Forecast & Analysis, 2004-2009 , IDC, May 2005. N2: Canadian Local Telecom and VoIP Services Market Report , 2005 Edition, NBI/Michael Sone Associates, November 2005, page20. N3: Canadian Local Telecom Services Market Report , 2004 Edition, NBI/Michael Sone Associates, November 2004, page 18. N4: Canadian Telco & Cable Valuation Monitor - 2006: The Year Ahead , Merrill Lynch, 11 January 2006, page 15. The Merrill Lynch estimate excludes the Call-Net forecast which appears to include both traditional landline and VoIP. N5: Canadian Telco and Cable Quarterly Preview , Merrill Lynch, 13 April 2005, page 8. The Merrill Lynch estimate excludes the Call-Net forecast which appears to include both traditional landline and VoIP. N6: Top of the First - the VoIP Battle begins , Seaboard, August 2005, p. 6 and Brace Yourself! 2006; the Year in Preview , December 2005, page 4. N7: An Exciting Year Ahead: SeaBoard's Views on the 2005 Communications Market , SeaBoard Group, January 2005, page 4; N8: LYA Canadian Consumer Telecom & Cable TV Market Forecasts 2004 , Lemay-Yates Associates Inc., August 2004, page 33. The LYA estimate excludes the CLEC VoIP forecast since a breakdown between CLEC VoIP and switched forecast was not provided. As well, the LYA estimate includes some non-VoIP telephony subscribers by cablelcos (presumably EastLink). Attachment 2 Page 2 of 19 Table 2 Residential VoIP Service Providers in Canada – March 2006 Service Service Launch Price Company Category* Headquarters Territory** Date*** (Monthly)**** 1 $9.95 to ACANAC 1,2 Toronto Canada Not available $16.95 Not Residential VoIP Aliant Charlottetown Not available Not available available trial Not Planned launch Amtelecom Aylmer Not available 2 Not available available "Later this year". British Columbia: New Westminster, North Vancouver, Richmond, Surrey (Newton), Surrey, (Whalley), Vancouver and Victoria; Alberta: Calgary and Edmonton; Ontario: Brampton, Cambridge, Hamilton, 3 Kanata, Kitchener, London, Malton, $29.95 to AOL 2 Toronto December 2004 Mississauga (Cooksville), Mississauga $39.95 (Streetsville), Oshawa, Ottawa, St. Catharines, Thornhill, Toronto and Unionville; Québec: Laval (Chomedey), Laval (Port Viau), Hull, Montréal and Québec City; Nova Scotia: Halifax. Apple Computer 1 California Global June 2003 Free British Columbia: Abbotsford, Kelowna (Winfield), Vancouver, Victoria and Whistler; Alberta: Calgary and Edmonton; Saskatchewan: Regina; Askivision $19.90 to 4 2 Saskatoon Manitoba: Winnipeg; September 2004 Systems Inc $39.95 Ontario: Kitchener, London, Ottawa, Toronto and Windsor; Québec: Montréal and Québec City; Nova Scotia: Halifax; U.S.: 37 cities. Expected "this Aurora Cable 2 Aurora Not available 5 Not available winter". British Columbia: Vancouver and Victoria; Alberta: Calgary and Edmonton; Ontario: Cooksville, Hamilton, Kitchener, London, Malton, Ottawa, Toronto; Québec: Boucherville, Chomedey, 6 Laprairie, Montréal, Pointe Claire, $10.95 to babyTel 2 Montréal May 2004 Québec City, Sherbrooke, St.-Lambert $31.95 and Trois-Rivières; Nova Scotia: Halifax; U.S.: 62 cities7; Mexico and Europe: planned for early 2006.8 1 www.acanac.ca 2 Michael Andrews, President and CEO of Amtelecom, as quoted in Amtelecom wires the farm, Financial Post, 3 February 2006. 3 www.totaltalk.ca 4 www.aski.ca 5 www.aci.on.ca 6 www.babytel.ca 7 Canadian Local Telecom and VoIP Services Market Report, 2005 Edition, NBI/Michael Sone Associates, November 2005, page 64. 8 Canadian Local Telecom and VoIP Services Market Report, 2005 Edition, NBI/Michael Sone Associates, November 2005, page 64. Attachment 2 Page 3 of 19 Table 2 Residential VoIP Service Providers in Canada – March 2006 Service Service Launch Price Company Category* Headquarters Territory** Date*** (Monthly)**** Ontario: Barrie, Guelph, Hamilton, Kitchener-Waterloo, London, Oshawa, Bell Canada - Bell Ottawa, St. Catharines, Toronto and 2 Montréal April 2005 $34 to $39 Digital Voice Lite Windsor; Québec: Hull, Montréal, Québec City, Sherbrooke and Trois-Rivières. Ontario: Ontario: Greater Toronto area and September 2005 Bell Canada - Bell $40 in Ontario; 3 Montréal Hamilton; Digital Voice $35 in Québec Québec: Greater Montréal area. Québec: October 2005 British Columbia: Abbotsford, Kelowna, Vancouver, Victoria and Whistler; Cayoosh Alberta: Calgary and Edmonton; Salmon Arm, $9.95 to Communications 2 Ontario: Hamilton, Kitchener, London, July 2004 British Columbia $29.95 Inc9 Ottawa, Toronto and Windsor; Québec: Montréal and Québec City; Nova Scotia: Halifax. British Columbia: Abbotsford, Kelowna, Vancouver, Victoria and Whistler; Alberta: Calgary and Edmonton; Chase Cable & Salmon Arm, $9.95 to 10 2 Ontario: Hamilton, Kitchener, London, July 2004 Internet British Columbia $29.95 Ottawa, Toronto and Windsor; Québec: Montréal and Québec City; Nova Scotia: Halifax. Ontario: Burlington, Chatham, Georgetown, Hamilton, Kingston, Milton, Oakville, Waterdown and Windsor; Québec: Baie Comeau, Drummondville, Ontario: Matane, Mont-Joli, Pointe-du-Lac, Pointe- $44.99 to au-Père, Port Cartier, Price, Rimouski, $54.99; Cogeco11 3 Montréal Rimouski-Est, St-Anaclet, Ste Flavie, St. June 2005 Hyacinthe, Sept ÎIes and Trois-Rivières. Québec: $39.99 to 38% of homes passed have access to $49.99 Digital Phone Service.12 "Company is on track to make telephony available to 75% of homes passed by August 2006".13 British Columbia: Abbotsford, Kelowna, Vancouver, Victoria and Whistler; Alberta: Calgary and Edmonton; Saskatchewan: Regina; Manitoba: Winnipeg; 14 Believed to be $9.95 to Columbia Cable 2 Victoria Ontario: Guelph, Hamilton, Hespeler, 2005 $36.95 Kingston, Kitchener, London, Oshawa, Ottawa, St. Catharines, Toronto, Waterloo, and Windsor; Québec: Montréal and Québec City; Nova Scotia: Halifax. 15 489 cities in British Columbia, Alberta, $9.95 to Comwave 2 Toronto 16 June 2004 Manitoba, Ontario and Québec. $29.95 9 www.cayooshcom.com 10 www.mascon.bc.ca/chase 11 www.cogeco.ca 12 Cogeco press release, Cogeco Cable extends its digital phone service to several cities in Québec, 28 March 2006. 13 Louis Audet, Cogeco President and CEO, as quoted in Cablecos' share of telephony market continues to grow at steady pace, Decima Network Letter, 18 January 2006. 14 www.yourlink.ca 15 www.comwave.net 16 Canadian Local Telecom and VoIP Services Market Report, 2005 Edition, NBI/Michael Sone Associates, November 2005, page 87. Attachment 2 Page 4 of 19 Table 2 Residential VoIP Service Providers in Canada – March 2006 Service Service Launch Price Company Category* Headquarters Territory** Date*** (Monthly)**** Québec: Charlesbourg, Lac-Beauport, Coopérative de Charlesbourg Lac-Saint-Charles, NDL Bon-Pasteur, $11.75 to Câblodistribution 2 region, north of 2004 17 Stoneham, Ste-Brigitte-de-Laval and $29.95 de l'arrière-pays Québec City Tewkesbury. British Columbia: Abbotsford, Kelowna, Vancouver, Victoria and Whistler; Alberta: Calgary and Edmonton; Saskatchewan: Regina; Manitoba: Winnipeg; 18 Believed to be $9.95 to Copper Valley 2 Victoria Ontario: Guelph, Hamilton, Hespeler, 2005 $36.95 Kingston, Kitchener, London, Oshawa, Ottawa, St. Catharines, Toronto, Waterloo, and Windsor; Québec: Montréal and Québec City; Nova Scotia: Halifax. British Columbia: Vancouver and Victoria; 19 Alberta: Calgary and Edmonton; Cybersurf 2 Calgary October 2005 $39.95 Ontario: Ottawa; Québec: Montréal. British Columbia: Abbotsford, Kelowna, Vancouver and Victoria; Alberta: Calgary and Edmonton; 20 $18.95 to Digital Voice 2 Vancouver Manitoba: Winnipeg; Not available $44.95 Ontario: Hamilton, Kitchener-Waterloo, London, Ottawa, Toronto; Québec: Hull and Montréal. British Columbia: Abbotsford, Kelowna, Vancouver, Victoria and Whistler; Dolphin Global $10.95 to 21 2 Vancouver Alberta: Calgary and Edmonton; Not available Tel $39.95 Ontario; Toronto; Québec: Montréal. "Execulink is getting ready to 22 Not Execulink Thedford Not available launch their new Not available available Residential VoIP service."23 Ontario: Ajax, Alton, Aurora, Barrie, Belfountain, Bolton, Bond Head, Brampton, Brougham, Burlington, Caledon, Caledon East, Cedar Valley, Cheltenham, Concord, East Gwillumbury, Etobicoke, Georgina, Gormley, Greenwood, Halton Hills, Holland Landing, Hornby, Huttonville,