Wednesday, July 5, 2006

Bell Launches Optimax - It's a Bird, It's a Plane - But It's Not IPTV

At 9am today, Bell Canada had an analyst call to tell us about their new fiber service to deliver higher speed to Sympatico broadband subscribers. Unfortunately, the invite was too short notice for me, but I've got the story now, so here we go.

It's called Optimax, which is a very promising name. Sounds very powerful - optimum, maximum - but the name doesn't really grab me. Too generic and space agey, and a bit like one of my favorite oxymorons - "new and improved". As George Carlin wryly observed long ago (when he was both funny and dangerous), how can something that's new be improved at the same time? Sort of like jumbo shrimp. I think about these things too much, but I'll bet I'm not the only out there who would do a Simon Cowell, and say "it wasn't your best"....

That said - now I'm speaking to those of you outside of Canada - this is Canada, and we have these peculiar language laws where it's French first in Quebec. I'll leave it at that, but given that Optimax is launching first in Montreal, the name has to work in both languages. My French isn't very good, but I suspect Optimax is a unisex type of word that works equally well in English and French. On that level, the name works, so I'll stop harping on the name thing now.

The analyst call was hosted by Kevin Crull, Bell's President of Residential Services, and I'm told he steered clear of questions about IPTV, which is what most of us are really wondering about. With all the wonderful throughput Optimax delivers - up to 16 Mbps (at $80/month)- one would think Bell was ready to launch IPTV. Clearly, it's not time yet, but at least they now have the transport in place. For those keeping score, this is a FTTN - fiber to the node - deployment, much like what AT&T is doing - and what supports their U-verse IPTV service, which launched last week. FTTH - fiber to the home - is the other route to go, but it's more costly and time-consuming. Verizon is doing it this way, and the payoff is much higher bandwidth capacity - Optimax, you might say.

So, what's the big deal here? One word - Videotron. They've been a real thorn in Bell's side, and their initial launch of VoIP in Montreal has been quite successful - maybe not profitable, but pretty effective at stealing away a lot of Bell subscribers. So, is it a coincidence that Bell is launching Optimax in Montreal - I think not. Without IPTV or a Triple Play bundle to swat back at Videotron, a souped up Internet service is the next best thing.

Once again, Bell takes the high ground by not competing on price - which I think is the right way to go. They're not taking the bait the way CallVantage did in 2004 when Vonage started a very costly price war. And there's nothing in this to do with VoIP. Bell is just steering clear of this, and let Videotron stay with their low priced phone service.

Bell's enhancement to Sympatico gives subscribers more capability than what Videotron can deliver for the fun stuff - gaming, music downloads, video streaming, etc. If you can't win them back by matching price, you take it up a notch, as Emeril would say, with a premium service that gives people a richer experience for the things they love to do. If you can't afford $80 for 16 meg, that's ok. Bell can give you 10 meg at $65. You want choice, you got it. You want to stay in the slow lane for your fun, then stay with Videotron.

It's a competitive market, and while Optimax isn't revolutionary, I think it's a pretty good comeback to counter Videotron. The price conscious subscribers are probably not worth fighting for, but at least Bell can now go after the lost customers they really want back, at least long enough until IPTV is finally ready.


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10 comments:

ipcom said...

Posted by: Andrew

Good Catch Jon. 1 meg upload for $80.oo a month? They have to be kidding. I get 6 and 1 with my Cable company now for 46.95, you really won't notice that big of a difference between 6 down and 16 for general internet surfing. Open message to Cableco's and Telco's - take the cap off the upload so I can really run powerful web apps., (ie. large VoIP conferences, streaming video etc.) from my home office. Or is there some technical reason they don't provide asynchronous access to the net?

ipcom said...

Posted by: jules

Andrew - you optimist you ;-)
Aha - your "powerful web app" of VoIP conferencing is another person's porn server ;-)
The carrier side of me says that SOHO services require something more (and more $$) than resi services. I bet Bell will pop something with more of a biz flavour out of the ovens this fall.

Here's hoping for async service...
-jules

ipcom said...

Posted by: aj

Vid�otron has been in the 16 Mbps fast lane since March - and "throughout its service area" not just Montreal:
http://www.videotron.com/services/en/internet/caracteristiques-xtmplus.jsp

ipcom said...

Posted by: Jon Arnold

Thanks aj;

I stand corrected, and will add the link here to the Videotron press release announcing their "Extreme" service in late February:
http://www.videotron.com/services/static/en/pdf/com_extremeplus_20fev06.pdf

This doesn't change the basic story line much, though. So, now Bell is just catching up to them with the same service - same speed/same price - instead going one step ahead. Main issue is still the same, though - gotta compete more directly against Videotron.

ipcom said...

Posted by: Ken

Bell is one strange company. What their press release doesn't talk about is a purchase they made two years ago of a local Videotron competitor VDN (VDN.ca). VDN, a Bell division, offers faster service than Videotron for a lot less (High Speed VDN 8MB/sec download, 1 MB upload and 60GB/month for 34.95/month versus High Speed Videotron 5.1MB/sec, 1MB upload and 20GB/month for 48.95/month - both prices calculated without taking TV bundle).

So the big question is how well can Optimax really do in light of one of their own division offering a significant step up from Videotron at a discount?

Now on the post about Videotron's extreme plus highspeed. This service seems crippled when compared to its slower Extreme Highspeed as you only get 20GB/month with the Extreme plus service and unlimited GB/month with the Extreme service (see comparison chart at http://www.videotron.com/services/en/internet/comparer-xtmplus.jsp).

I've switched over and couldn't be happier. And for those looking for deals, here is an opportunity to stick it to Videotron. If you own your videotron cable modem then it will work with VDN. If you don't own one, don't buy it from VDN (it will cost you $99), instead go to Bureau en Gros and buy a Videotron cable modem for $49 (99-44.95 instant rebate).

ipcom said...

Posted by: Jon Arnold

Hi Ken;

Thanks for this - that's really interesting, and I'll bet not widely known. This post has sparked some good discussion, which what blogs are really good for. I appreciate your sharing this!

ipcom said...

Posted by: Mike

Andrew - Optimax uses ADSL2+ and the max upload bandwidth is 1 mbps. This is a technical limitation.

Also, with this new service you will only get 10 or 16 mbps if you can achieve the full speed, they will not put you on the specific price plan if you cannot achieve the full speed of that plan.

ipcom said...

Posted by: Mr.X

VDN pull a coax from the fiber optic strait from the pole in your backyard. Not from a coax loop in your neibourhood. Cant be faster. (ping)
Dont know about optimax...

ipcom said...

Posted by: Andre Tremblay

This comment really caught my eye.

"Good Catch Jon. 1 meg upload for $80.oo a month? They have to be kidding. I get 6 and 1 with my Cable company now for 46.95, you really won't notice that big of a difference between 6 down and 16 for general internet surfing."

That might be true assumming you would get it, that is the problem with the SHARED CABLE infrastructure you never know what you get.

ipcom said...

Posted by: Marc Trepanier

re: name game

I believe the "opti" stands for optical, not optimum

not sure of the infrastructure Bell has, but optical will not have the same limitations as coax

any cap on fibre is at the hardware bits at the end of the optical cable, so 10-16meg is only the beginning, whereas with coax you may see only marginal improvements from here on out because it's limits are imposed more on the fact that it is a copper based medium of transmission