Canadian Government Makes the Right Choice

Thanks for returning. You're a very smart person.

The Canadian Government has decided to overturn a rulling by the Canadian Radio Telecommunications Commission and de-regulate the Candian VoIP market. The Candian Government stated that low barriers to entry will create enough competition for the industry to regulate itself. Minister of Industry Maxime Bernier announced at an Economic Club of Toronto luncheon yesterday that,

“Barriers to entry in this market are low; there is no reason to regulate it,” he said. “In a competitive sector, there is no reason to regulate some companies while others can offer the services they want at the prices they want.”

This ruling is a win for the Canadian consumer. Under previous restrictions, incumbent phone carriers such as Bell Canada Enterprises Inc. were limited to how low they could price their own VoIP services to compete with specialized providers such as Vonage Canada Inc. With the deregulation, watch as the prices for VoIP service race towards zero in a frantic attempt by service providers to gain market share.

While this is great news for the Candian consumer, it is not so great news for incumbents such as Bell Canada and SaskTel as they will now be forced to aggressive market a service that competes with their PSTN offerings. A service that will be considerably cheaper and over time will substantially impact their revenues. The Canadian VoIP market will certainly be worth keeping an eye on over the next few months as the offerings and competition heats up!