Shaw Cable Telephony - 90,000 Subscribers Can't Be Wrong

Very interesting stat today from Shaw Cable. Shaw is the dominant MSO in Western Canada, and they launched their VoIP offering - Digital Voice - earlier this year in Alberta's major urban markets.

Today, they announced having 90,000 VoIP subscribers, which is a pretty big number all things considered. A while back they reported something like 20,000 subs, and most people took that to mean that takeup was sluggish, largely due to the relatively high price point - $55 per month.

In comparison, Videotron launched a budget priced VoIP offering, and it's been a huge success, primarily in greater Montreal. They're well north of 100,000 subs, and are undboubtedly causing Bell some pain. However, they've drawn criticism for the low pricing, and most people - myself included - don't see how they'll make money with VoIP.

Shaw, on the other hand, has adopted the "rational pricing" strategy, and most view their pricing as being too high to ever get much traction. Well, Alberta is less populated and less dense than Quebec, and on a per capita basis, I would argue that their 90,000 is a pretty decent penetration.

Perhaps more importantly, they've done it at a much higher price point than Videotron. I'm impressed. You'd have to think Videotron is kicking themselves for leaving so much money on the table, and I'm sure Shaw is making decent margins, and laughing all the way. The moral of the story to me is a good one - Shaw is the best example in North America that I've seen where success with VoIP has not been driven by price.

Mind you, Telus - the Western Canada ILEC - has had its share of troubles, big time, recently, and I have no doubt that part of Shaw's success is due to a backlash from unhappy Telus subscribers. Shaw is the first real alternative they've had to phone service, and no doubt many have jumped at the chance to bail on Telus. That said, we'll have to watch how things unfold and if Shaw can keep this pace.

Many of Telus's troubles have been resolved, and hopefully the worst is behind for them. If so, they may be better able to counter this threat now, especially since they have a big leg up on Shaw in the mobile market. Of course, Shaw is working on this, and to make things interesting, they also announced today they'll be launching their VoIP service next in B.C., which is where Telus has its HQ. To date, Telus has been conspicuously absent with a consumer VoIP offering, but at least they've announced plans to ramp up their TV offering in Shaw's back yard to keep up. This is definitely a good story to watch.