battle of the network stars

Shaw rolls out digital phone system

Cable TV company introduces service to B.C. in Victoria

Times Colonist (Victoria)

Thursday, October 13, 2005

By Darron Kloster

Cable company Shaw Communications has tapped into the telephone business in British Columbia, using Victorians as the initial samplers of its voice-over Internet protocol (VoIP) service and the city as a new front to wage war with Telus.

"We're breaking down the last monopoly in Canada -- the phone company," Shaw's chief executive Jim Shaw said in an interview during a red-carpet rollout at the Marriott Hotel.

"I think it's about time," he said, unveiling the new service to members of the business community and the public.

Shaw introduced its digital phone service -- which delivers voice over the Internet via its broadband network -- earlier this year in Edmonton and Calgary. Winnipeg was added in July and Vancouver is expected to be added in the new year. The Victoria service has been operating since the beginning of the month.

With Telus already bruised from a prolonged labour dispute and escalating complaints over service, Shaw's rollout couldn't have been better timed. Consumers are starting to embrace VoIP technology and newer companies and service providers who offer VoIP for little or no cost.

Shaw expects to attract its current cable customers and lure others away from Telus with a flat rate of $55 per month ($65 if you are not a Shaw subscriber). The fee provides phone service and unlimited long-distance calling in North America along with voicemail, call forwarding, call waiting, call display, call return, three-way calling and other features such as 911, directory and operator services.

For Amy Abel, a recent university graduate from Ontario, going with Shaw was a no-brainer. She has three roommates -- all recently moved from out east -- and a single bill for cable TV, Internet and telephone.

"We're all making long-distance calls, so this way we don't have to figure out who made what call. It's just one bill and we split it," said Abel. "Everything was set up at the same time. It was convenient, and we're very happy with it, too."

Shaw president Peter Bissonette said the response has so far been "overwhelmingly positive."

On its website, Shaw said 95 per cent of phone customers recently surveyed are happy with the service.

Bissonette said Shaw had more than 22,000 digital phone customers in Alberta as of May 31. An updated count with Manitoba and B.C. residents will be revealed when the public company releases its next quarterly financial report Oct. 25.

Bissonette said Shaw's phone service is a primary line that uses the company's established broadband network. Shaw considers this so-called managed IP telephony "more reliable" than other VoIP services such as PC-to-PC or PC-to-phone offered by Skype, and applications that operate over the public Internet and rendered by service providers such as Primus and Vonage. Some of the services are free or cost pennies per minute.

Telus is still testing its own residential VoIP service and has yet to announce a date for the launch.

Jim Johannsson, director of consumer marketing for Telus, said Shaw has created a "bare bones" telephone system and he cautions consumers to decide what they need before taking the plunge.

Johannsson, based in Edmonton and in charge of testing all new product for Telus, said Canada's second largest phone company is moving forward on bundling new features, price packaging and merging television, telephone, Internet and wireless products into innovative uses for Canadians.

He said Telus currently offers 20 different phone plans.

"We welcome the competition ... competition is good," said Johannsson.

J.R. Shaw, an Ontario native who founded the cable company in Edmonton in 1966, said although Victoria was a sentimental choice to launch, it had more to do with logistics, installation and testing of the system and its equipment. The elder Shaw, who still serves as chairman of the board for Shaw, owns a home on Lands End Road in North Saanich and spends many months a year here.

Vancouver is a much larger market with more lines and equipment -- and a huge capital cost.

Shaw spent more than $20 million in the Victoria region to upgrade lines, routers and power systems for the phone service. It will be available to start in Victoria, Saanich, Oak Bay and areas closer to the core. The service will eventually be moving to outlying suburbs, said Bissonette.

Jim Shaw said the company has about 140,000 cable and Internet subscribers in Greater Victoria and another 60,000 elsewhere on the Island.

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