AOL Canada Goes VOIP

AOL Canada has finally announced plans to unveil its Internet telephony service - nearly a year after it announced its intention to be in the market by June, 2004. AOL will have two plans: a $34.95 a month plan with the features you get with Vonage and Primus , as well as 60 minutes of long-distance in North America; and a $44.95 a month service that comes with 1,000 minutes of LD.

At first blush, it seems expensive compared with everyone else in the market. Then again, AOL has always believed for some strange reason its service should be priced at a premium. The difference in the fast-emerging Internet telephony market, however, is there is plenty of competition out there and price is a key marketing issue. AOL Canada is clearly hoping its customers - estimated at 300K to 500K - will jump on the Internet telephony bandwagon by turning to AOL.

If the company thrives in the telephony market, I'd frankly be very surprised. I've come to the view the market will mostly be dominated by the carriers and cablecos, and perhaps niche players such as Vonage.