Vonage Canada - 1 Year Here!

This afternoon (Thursday), I attended the very enjoyable open house at Vonage Canada's corporate offices in Mississauga, which is just west of Toronto. They were celebrating one year of service in Canada, and the mood was good.

Like Vonage in the US, they are positioning themselves now for a serious run to be the alternative broadband voice provider. They have a nice marketing theme targeting the broad consumer market, with the catchy tag line "I VoIP With Vonage". Lots of ads splashed on the walls with photos of all kinds of everyday people flashing a "V" with their fingers for Vonage.

The use of "VoIP" in the tag line seems at odds with most of the broadband VoIP marketing out there, which tends to focus on the service offering rather than the technology. It's early days yet, but I'd argue that the mass market - especially in Canada - is not familiar enough with the term VoIP to really know what it means, and how it relates to what they're using now for voice. I digress.

Spoke with Bill Rainey, their President, and Joe Parent, their VP of Mktg and BD. Not surprisingly, no one is saying how many subs, but they're "meeting expectations". Not sure what that really means, but Vonage is making the most noise in Canada about consumer VoIP among the pure plays. Primus Canada may have been first to market, but their profile has been lower, and I suspect they will not keep pace with Vonage Canada once things ramp up.

The good news is that Vonage Canada now offers LNP and 911, which of course are must-haves, especially to compete against the MSOs and ILECs, who are starting their moves.

As with the US, Vonage is pioneering the use of retail channels, and in Canada are partnering with Staples Business Depot, Radio Shack, as well as London Drugs in Western Canada. The message I'm hearing is that other large partnerships are in the works, and I wouldn't be surprised to see them launch deals with major branded outlets such as department stores or grocery stores.

Finally, as often is the case, interesting stories always seem to happen around things like this. The Canadian ILECs have been staying out of consumer VoIP until the CRTC clarifies its position, which right now is not sympathetic to the incumbents. However, in Quebec - where things like this tend to happen - Bell Canada suddenly announced VoIP service in three Quebec markets. This was not likely a ploy to steal Vonage's thunder - Canadians are far too polite!

Rather, this was a direct challenge to the CRTC, who the incumbents see as taking too long to reach a decision on VoIP. Quebec's major MSO is Videotron, and they recently launched VoIP on a small scale in South Montreal. Seems clear that Bell is saying they are not going to wait around for the CRTC while an MSO competes uncontested in their back yard. Now THAT is very un-Canadian, and indicates the state of unrest and uncertainly among those who want to bring VoIP to the market.

It will be very interesting to see what happens next now that the ball is in the CRTC's court. What would Michael Powell do?