Rogers Just Doesn't Get It

Chris Tyler's Blog

Rogers Just Doesn't Get It Mon, Jul 18. 2005

I use Voice-Over-IP for my phone service. That means that my residential phone calls travel over the Internet. My Internet provider is Rogers Cable; my VOIP provider is Vonage.

Rogers has just started to offer residential phone service using VOIP over their private network -- but they just don't get it. The whole point of VOIP is cost reduction; by [a] taking advantage of the economies of scale provided by the Internet and [b] offloading some of the service details to the consumer, the cost of phone service is dramatically reduced.
With Vonage I pay $19.99 a month plus tax. That gives me a phone line that is fully-loaded -- voice mail, call waiting, call display, call forwarding, three-way calling, you-name-it-I-got-it -- plus 500 minutes of calling. All of North America is a local call. In a year I've never exceeded 500 minutes a month, but if my family became heavy talkers I could upgrade the package to unlimited calling or pay $1.80/hour for additional time. The service has been reliable (except for a hardware defect, which Vonage corrected with a replacement VOIP adapter) and we're paying less than half of what we used to pay Bell.

Rogers, on the other hand, has set their basic pricing at $29.95 ($24.95 if bundled with other Rogers services). This includes one feature and no long distance! The Rogers Long Distance service is priced in a way similar to traditional analog phone service.

To look at it another way, if I have IP service, a fully-loaded Vonage line with unlimited North American calling is $39.99 before tax. A fully loaded Rogers line with unlimited North American calling is $35.66 for the line and 6 calling features, plus $8 for two extra calling features, plus $19.99 for unlimited long distance, plus a $4.95 "network access fee" -- a total of $68.60, or 71% more.

Where's the value proposition in offering to do what Bell is doing for the same money? If I'm going to cough up that kind of cash, I may as well go with the company that has 125 years' experience providing phone service.

I'm firmly convinced that long distance will become free and calling features will become free. Revenue from long distance won't cover the cost of detailed billing, and the cost of managing different line configurations for every customer will exceed the revenue that the line features will generate. Vonage already knows this.

The sooner Rogers clues in, the sooner they will start to make money from phone services.
Posted by Chris Tyler in E-COMmon Sense Comments: (5) Trackbacks: (0)

Trackbacks
Trackback specific URI for this entry

No Trackbacks

Comments
Display comments as (Linear | Threaded)

#1 - Kieran Tracey said:
2007-01-02 03:45 - (Reply)

Rogers can't charge less for their service and they have to be comparable to traditional service providers like Bell Canada. They are standing members of the CRTC and they make the pricing rules.

That was changed recently. A price drop should soon follow.

Have you read up on 'Traffic Shaping'?

kt

#1.1 - Chris Tyler said:
2007-01-02 11:24 - (Reply)

Actually, the pricing regulations only applied to the legacy telcos -- companies that held over 75% of the market in each region. Rogers was pretty much free to compete as fiercely as they wanted, and they dropped the ball.

The complete deregulation that has been promised should put some pressure on the industry to actually start competing -- but I think it will take a price drop from the monopoly carriers to get a war going.

#2 - Nathan Marshall said:
2007-01-10 00:13 - (Reply)

I just got an email from my mom in Toronto who said that her new condo is Rogers-exclusive and they won't allow landlines in the building. She asked if she really had to pay over $70 for similar phone service that she is getting from Primus now, or if Vonage would work.

Rogers' offerings are apparently so bad that people are going to try ANY other service before. My response was I would even go down and set it up for her rather than subjecting someone to Rogers' gouge.

Oh, and that means no StarChoice, ExpressVu or DSL either. How pathetic.

#3 - Bryan Reinblatt 2009-06-18 17:39 - (Reply)

Chris,

Did you know that when I clicked on your blog I was rerouted to the Vonage Website

Not sure what is going on but I had to manually put your URL in to the address bar.

I am not happy with Vonage right now and I thought you should be aware.

Bryan

#3.1 - Chris Tyler 2009-06-18 22:56 - (Reply)

Bryan,

You say that you "clicked on" my blog -- where did you click? There are no redirects here (nor ads from Vonage) that would do this, so I'm wondering where the link was located.

Thanks--

-Chris


Add Comment

Enclosing asterisks marks text as bold (*word*), underscore are made via _word_.
Standard emoticons like :-) and ;-) are converted to images.

To prevent automated Bots from commentspamming, please enter the string you see in the image below in the appropriate input box. Your comment will only be submitted if the strings match. Please ensure that your browser supports and accepts cookies, or your comment cannot be verified correctly.
CAPTCHA