Bell Canada: the Voip Challenge

The Overall Direction of disruptive Technologies Voice over Internet Protocol is a telephone service operating over the internet. VOIP provides quality voice communication services to anyone with access to a high speed internet connection which is a growing norm in our society. Voice over Internet Protocol is an exciting innovation to communication technology and can be delivered in one of many ways including: 1)PC to PC 2)PC to Phone 3)Phone to Phone New Innovations generally have several impacts on businesses in the industry and the business that created it.

Established businesses that do not adopt the new concept will usually be left behind the dust while businesses that do will survive. Strategy Bell has been pitted against many competitors recently such as long-distance service providers and other VOIP providers. Their strategy thus involved bundling several services and offering a discount to the customer in exchange for timed contracts. The increase in High-Speed Internet subscribers combined with the decrease in Fixed-line Telephone subscribers presents bell with an initiative to further develop their VOIP capabilities.

The current figures show a growing trend leaning more towards an internet lifestyle which favours a telephone service operating over the internet. ProductSubscriber Growth Percentage Fixed-line Telephone(1. 7) High-Speed Internet24 Video7. 7 Wireless Telephone10. 4 Bell’s Core Business Bell focuses primarily on Ontario and Quebec which generates large profits to BCE. Some of Bell’s services include mobile telephone services, satellite television and other related communication services. Bell’s massive elecommunication networks combined with its good reputable name has established itself as a provider of digital content for families at home. Competition Bell faces heavy competition from cable companies that offer similar services. Cable companies also adopted similar market share strategies to bell including bundle packages that provide Digital TV, High speed Internet, wireless telephones, and VOIP. Installation processes often required a heavy expense which will put Bell at a disadvantage to reclaim lost customers. SWOT Analysis Strengths Long distance VOIP-initiated call to the PSTN can be routed over the internet. ?Possibility of bundling features without additional costs. ?Instant Management of calls. Weaknesses ?Power interruptions at the subscriber’s home can cause service loss. ?Difficult to provide 911 services. ?VOIP is still not accessible for many customers ?Difficulty managing calls from TV systems, alarm systems, faxes. ?Security vulnerabilities. ?Concerns with Quality of service. ?Diversified environment with employees with knowledge of VOIP spread out. ?Bell has low success rates in unregulated ventures. Opportunities Bell still has a fairly large market share and can appeal to their customer base. ?Bell has $25 to $40 million invested in VOIP technologies. ?Bell is an excellent source of expertise in the area of VOIP Threats ?Immense competition from providers such as Vonage, Primus, and Cableco. ?CRTC ruled “exempt regulation” which allowed competitive entry. ?In order to offer VOIP, Bell has to unbundle its High Speed Internet package which will allow its current customer base to seek other options. ?Low cost entrants are already in the market. ?Bell promotions will generate unwanted public awareness. Career Implications

Close’s current occupation as CEO of Nextair creates a considerable amount of stress due to the cash flow problems and its impact on his personal finances. However, the proposition of an autonomous division by Bell that is designated as a separate division has its fair amount of risk and challenges. The career transition from one to another does not seem like it will levitate any stress from Close because he will be working in an environment that is similar to an uphill battle. Conclusion The addition of VOIP technology can be a leading trend and a massive revenue generator in the coming future.

Therefore the technology is significant to a certain extent, given its current competitive environment. If it were positioned as an independent value-added service, it would likely impact Bell’s core business slightly because it should be marketed as a major technological innovation instead. In order to achieve a competitive advantage, Bell must incorporate VOIP into a division and create customer perceived quality while maintaining a competitive price. Close’s decision will therefore be an important factor to Bell’s success, as well as his own.