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VoIP top priority for Bell Canada in 2004

The Canadian phone company is moving more aggressively toward Internet Protocol technology. Top on its "to do" list: voice over IP service for residential customers.

Bell Canada is moving more aggressively toward Internet Protocol technology. Top on its "to do" list: voice over IP service for residential customers.

At its annual shareholder meeting in Toronto on Wednesday, Michael Sabia, chief executive officer of the Canadian phone company, outlined his company's strategy for moving all of its communications services onto an IP-based communications network.

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"It's clear the future for the industry is IP," Sabia said in a statement. "The company is solidly engaged, and we have the plans and the proven ability to execute to support our determination to compete and win in an IP world."

Bell Canada's overall objective is to migrate 100 percent of its traffic, including all of its voice traffic, onto a national IP backbone network within three years. The carrier said that IP-based communications will provide its customers with several benefits including simpler provisioning, greater self-service and multimedia Internet. The company said the move also will significantly reduce operating costs.

The company is putting its money where its mouth is. During his presentation, Sabia said Bell Canada's capital spending will not increase in 2004, but that it will reallocate spending to high-growth markets such as VoIP. He said that for the first time in the company's history, roughly 50 percent of its capital spending budget will go toward new growth areas.

Specifically, Bell Canada plans to launch a consumer VoIP trial in early 2004, and it will also progress with IP TV trials. The company plans to more aggressively market VoIP services to small and midsize businesses.

In the enterprise market, the company is developing an IP migration plan, which includes VoIP, for each of its corporate accounts in 2004. The carrier began testing VoIP among large business customers in January 2002, using equipment from Nortel Networks. It has been offering the service to customers since then.

The competition in the VoIP services market is heating up as U.S. Baby Bells, long-distance carriers and cable operators all jump into the market.

Just last week, AT&T announced plans to offer VoIP calling for its customers. Also last week, Qwest Communications International began offering VoIP to its residential customers in Minnesota.

Verizon Communications intends to offer VoIP to its digital subscriber line customers in the second quarter of 2004 and to business customers in the fourth quarter of next year. SBC Communications recently launched VoIP service in the small and midsize business market in 13 states. And in October, BellSouth announced it would start offering bundled VoIP services to small and midsize companies in a phased launch in nine states.

Some cable companies also are jumping on the VoIP bandwagon. Time Warner Cable and Cablevision Systems are planning residential offerings of the technology. Comcast and Cox Communications are dabbling in VoIP trials, but they have no plans of throwing out their old circuit-switched networks anytime soon.