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An Exciting Year Ahead: |
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SeaBoard’s Views on the 2005 Communications
Market |
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January 2005 - IGB
Grant +1 514 849 3508
& Brian Sharwood +1
416 413 9381
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KEY HIGHLIGHTS: |
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- This year will be an exciting one for telecom: we expect VoIP services
to take significant beachheads. Sporadic cable VoIP rollouts will happen
through the first half of the year, with more general availability by
3q05. The full marketing push will be in gear by the fourth quarter.
SeaBoard forecasts that over 150,000 customers will have signed up for
cableoffered VoIP telephony services; taking over 60% share of the still
small market, by the end of 2005.
- Driven by increased interest in the telephony product, and,
to some extent questioning the need for the ‘twisted pair’ connection,
cable will increase its share of the high-speed internet market. The
decline in their market share in this market will end this year and
we expect a 1-2% gain by the end of the year, with continuing increase
until 2009.
- Prices for telephony services will begin a descent. Cable
company offerings will be at parity with present wireline service
initially – but discounting
by independent providers (Vonage, BabyTel and Primus, as examples)
will lead the market lower. All players will need to pay close attention
to their competitors and be able to react quickly – even
given regulatory restraints.
- The year will see a resurgence in the pre-paid mobile services
market, with the entry of Virgin Mobile Canada, dancing to different
music than the rest of the players. The established players will need
to focus their attention on defending territory, and, importantly continuing
to grow the data service markets.
- Wireless will continue its inroad – wireless-only users
will continue to grow. By the end of 2005 as many as 5% of Canadian
households will have abandoned their landlines for the convenience
of a mobile only connection.
- The digital television market will continue to be dominated
by the satellite and cable companies but television services offered
by the telephone companies will be continue to be tested and honed
for broad roll-out by mid to late 2006.
- VoIP offerings, and telephone company hosted-VoIP services, will
take off in the small and medium business market. Harried entrepreneurs
will recognize the value of the new VoIP products and embrace the expanded
services suites.
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