THE CABLE INDUSTRY MIGHT not like reading this, heading into the local forbearance hearings next week, but residential phone choice seems pretty real to me.
If there was any doubt about it, my local newspaper, The Hamilton Spectator, delivered ample evidence last Wednesday. In the mess of inserts I curse about that usually flutter out of the thing, three glossy direct marketing pieces caught my eye: One from Primus; another from Rogers; and the third from Direct Energy.
Primus was a pure low-cost sell. “Get TalkBroadband and save big on your home phone service,” it said, beside a garish graphic which showed a price of $48.45 for service from the local phone company versus the Primus price of $19.95 a month. It also offered 100 Air Miles for signing up and made sure to point out it’s a sponsor of the home town team, the Hamilton Tiger-Cats (although with their 2-12 record, I’m not sure any company wants to tie themselves too closely to the toothless ’Cats).
The message was clear. You want the lowest price, come to Primus. Inside the insert, however, it did explain just what TalkBroadband and VOIP are, pushing people to the web site to sign up and get a free cordless phone.
The Rogers piece was a bit different: A bit more inviting with a higher-end look focused on a young woman. It offered a rate break up front, too, with the first month free, and turning the page over, it talked up Rogers Home Phone savings. It offered its best breaks, of course, through its service bundles. Rogers compared its rate packages to Bell Canada, too, offering Rogers Home Phone service for anywhere from $25.46 to $41.95 depending on bundling and features, beside Bell’s comparable rates, ranging from $30.60 to $47.55.
The Bell rates in the Rogers promo are different than stated in the Primus offer, which I’m sure is explained somewhere in the three-point-size type fine print which no one but the writer and proofreader likely had the misfortune to have to read with their magnifying glasses.
The Direct Energy insert was quite a bit different and no, it wasn’t offering phone through the power line. Its headline deal is free long distance for five years if you lock in your natural gas or electricity rate in with them. Deregulation in the energy industry has led to all sorts of interesting marketing plans, but I hadn’t seen the free LD offer before.
According to the insert, Direct Energy has partnered with Rogers for the communications aspect of the offer – and it’s not quite as it stated on the cover of the double-folded marketing promo. Direct Energy customers who sign up with the energy company for five years and then also sign on for LD with Rogers, will get 300 free minutes per month for free.
All three direct marketing pieces in one day though? This has to be confusing for Joe and Jane Bagadonuts, regular consumer. Can I combine Rogers Home Phone with the Direct Energy offer? No clue. On the Primus insert, I wonder what “911 service is available, some conditions apply” means. Is it available or not? I don’t think I want conditions on my 911, actually.
The Primus ad also says “Keep your own phone number or choose a new one from one of 18 major Canadian cities.” I’ve got to think that only the early adopters know what kind of advantage that is. And check out that $4.25-a-month system access fee in the Rogers fine print that isn’t included in its sale price (I pulled out my magnifying glass after all). Plus, the best deal is tied to Rogers Better Choice Bundles that I can only partly take advantage of with my Rogers Wireless service because my cable company is Cogeco.
My point to all this is not to pick on the advertising of the companies here. They just all landed on my doorstep the same day and I wanted to partially deconstruct the myriad choice available that must be baffling to consumers.
Baffling or not though, it says here that the incumbent telcos will have a point next week when they tell the Commission something like, “the market is already super-competitive, so please forbear from regulating right away.” In Hamilton, I can get Primus, Rogers, Vonage and others if I wish (and Cogeco is coming soon, I think, as the company is doing much work in my neighborhood). Choice is abundant.
Now here comes the “however”…
However, most markets are not in such a state yet where the incumbents like Bell and Telus should be deregulated (although the win-back restrictions which say the telcos can’t talk to former customers about anything at all for a full 12 months is way over the top). There may be tons of choice, but the incumbents are still very well entrenched and hard to move.
Traditional local phone service churns out cash for the incumbents and comprises an enormous chunk of their profits. They are very anxious to protect that. Unencumbered by what is now the relatively light leash of the current regs, they have the resources and market power to squish or seriously wound newcomers, even big cable. And, it doesn’t have to be on price (how about a free ExpressVu system or Sympatico MSN Premium with your local phone line?). The shackles, such as they are, must remain for at least a little while longer.
If the Commission follows past practices, it will probably pick a level of lost customers from the ILECs where a market could be considered competitive and deregulated – say 10 or 15%. With the speed in which Videotron in Quebec and Shaw in the west are signing up VOIP customers for example, that number, or any other, may not take long to reach and deregulation may happen pretty quickly after all.
Now if I could just decide whether I want to lock in my natural gas price in exchange for LD minutes, or get that Edmonton number I’ve always wanted, or to bundle up with Rogers or VOIP with Vonage or keep Bell or just chuck it all for Skype…
