AOL Canada to roll out national VoIP service within next two months

AOL Canada plans to roll out Voice over IP services across the country over the next 60 days, and the company’s GM of enhanced services is bullish on the market opportunity. Steve Koles tells Network Letter that while the ISP remains conservative on subscriber projections, the company will employ a wide range of mass marketing methods to attract as many current subscribers and non-members as possible to sign up for the service. AOL Canada’s success in bringing the Internet to the mass market could be a clear indication that the company will likely enjoy a similar level of success in the VoIP market. "We are looking at kind of crossing the chasm to taking voice services over the Internet to the mass market. We are contemplating, once we’re national, a fairly robust mass marketing effort that will be inclusive of a variety of mass marketing techniques, online and direct mail, etc.…We are also very focused on selling this to our existing set of subscribers in Canada," he says. The company, which announced on March 10 the rollout of national VoIP services within the next two months, has transformed itself over the past two years from a pure dial-up Internet play to a company offering a wide range of services. The VoIP rollout announcement last week came as part of a conference call discussing the Royal Bank of Canada’s decision to sell its 20% stake in AOL Canada to AOL Inc. AOL Canada is uniquely positioned to be a major player in the IP telephony space as it will be able to exploit the relationship it has with a subscriber base that is in the hundreds of thousands in Canada. But the company won’t be going after the low end of the market; it will instead focus on offering a premium service. Getting into the VoIP services market isn’t about providing discounted long distance services to Canadians, Koles says. "We don’t see it as just a matter of providing cheaper dial tone and cheaper long distance to users. If our intent of getting in this market was to engage in some sort of price war at the low end of the market we wouldn’t be interested…As an industry we all need to focus on what we are doing differently here. What sort of benefit are we providing to end users, rather than giving them cheap dial tone and cheap long distance service?" he says. Koles says AOL Canada’s strategy will focus on a number of elements including ease of use, enhanced services such as unified messaging, presence functionality and a robust offering that is equally suited for the residential consumer and small office home office (SOHO) user. "Our approach to market here is, number one, we’re going to have the first and only national regulatory compliant service, so things like local number portability and enhanced 911 services. These are not available from others in the market place today," he says, adding that features such as unified messaging and presence will be key attributes of AOL Canada’s VoIP offering"These are the things that are pretty unique and differentiated in the market place. So we’re going a little bit more on the premium approach to market in focusing on those who are looking for enhanced services, which is why I think we’re getting a lot of traction in the SOHO segment," Koles explains. Presence was singled out at the recent Voice over the Internet conference in California as being one of the key drivers for mass-market adoption of VoIP services. As Koles explains it, presence allows instant messaging users to determine who’s online and who isn’t, and this is where AOL has a distinct advantage over other VoIP providers. "If the VoIP world is going down the path of presence, AOL globally is uniquely positioned now because we have effectively been in the presence game for many, many years. We have 100 million AIM (AOL Instant Messenger) users in North America alone and so what we’re looking at and what we’re really excited about is extending our whole Internet voice services strategy into our existing presence strategy with AIM and as well the AOL service," Koles says. John Zeitler, VP of international strategic alliances for AOL, said during a conference call announcing the share buyback that it will give the company greater flexibility going forward. "We continue to believe that Canada is a very important market for us and holds a lot of possibilities. The plan from this point on is to continue investing in the growth of AOL Canada to try to move the company forward. We feel like another result of the this buyback is to provide us and Craig (Wallace, president and CEO of AOL Canada) with more flexibility going forward, and we think this will enable us to move even more quickly in the market. The other thing is this will enable us to start to leverage AOL Inc.’s assets a little more with respect to how we’re growing AOL Canada," he explained. Wallace echoed Zeitler’s comments. "I think the news today is really about combining the agility that we’ve had and the luxury we’ve been given to move fairly quickly in the Canadian market with the depth and breadth of resources that come to bear with both AOL Inc. and TimeWarner. So the takeaway here is really all about one thing: we’re talking about Canadians building services that meet the needs of Canadians with the benefit of global resources now available to us. And hopefully at the end of the day that translates into enhancing the scope of what people do while they are online and us impacting that in a positive way," Wallace said.

AOL Canada to roll out national VoIP service within next two months

News | March 16, 2005

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