Ontario Utility Bundles Services for Customers

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TORONTO -- With full deregulation of the Ontario electrical market set to take effect next year, Ontario Hydro Energy is moving to reinforce its relationship with consumers by offering Onsource, a new bundled utilities program.


Developed in cooperation with Mosaic Group Inc., Toronto, Onsource allows homeowners to consolidate a range of recurring monthly bills on a single statement. Services covered by the program include hydroelectric, natural gas, long-distance telephone, wireless telephone and water heating.


Additional services will be added over time. For many services, Mosaic will use Intelecom Systems' proprietary rating engine to provide pricing comparisons among competing service providers.


"The energy industry is transforming itself," said Michael Skea, president of Mosaic Digital, Mosaic Group's e-commerce division. "Effective product differentiation is a key factor for success. ... [Onsource] will combine the convenience of being charged for multiple services on one bill with the value of comparison-based pricing."


Ontario Hydro Energy, which is the energy retail subsidiary of Hydro One (formerly Ontario Hydro Services Co.), plans to test Onsource in 100,000 households, probably in Toronto, Ottawa and Mississauga, this summer. Depending on test results, the company will roll out the product in September.


The company also has launched a Web site, www.onsource.ca, allowing users to sign up, pay bills electronically and contact customer service. The Web site was designed by interactive marketing agency Cyberplex, Toronto.


Using what it dubs a "Best-of-Three" billing system, Onsource provides consumers the lowest rate offered by three competing providers in each service sector it covers.


While Ontario Hydro Energy is not normally associated with services such as long distance or natural gas, the company is betting the market will respond to the cost-saving opportunity, as well as the chance to cut back on the average 24 to 40 hours a year that homeowners spend paying bills.


Other utilities offering expanded services in response to deregulation include Toronto Hydro Energy Services and Enbridge Home Services, a natural gas supplier. Retailers also are responding to the opportunity, with Sears and others already offering a range of home services.


Ontario Hydro Energy was scheduled to open its electrical sector fully to competitive market forces in November, but that date has been postponed.


The firm expects that its first-to-market status will give it an advantage in the battle for convergent-billing customers. Consumer research has indicated that Onsource's primary target group is college-educated 32- to 52-year-olds with an annual household income of more than $80,000. They typically live in dual-income homes and have children.


The direct mail test drop for Onsource went to 80,000 households, mostly urban, across Ontario in early June. About half the mailings were dropped in Toronto. Phase two of the campaign was executed last month with a DM push to 160,000 households that rent Ontario Hydro Energy water heaters.


As part of the test, Ontario Hydro Energy placed follow-up phone calls to a small group of respondents and nonrespondents to obtain qualitative feedback on the campaign.


Mosaic Group has entered into a five-year contract with Ontario Hydro Energy to oversee the Onsource program.


Several Mosaic units will participate, including Intelecom, which will provide the convergence billing and comparison-based pricing platform; Mosaic Direct and Interactive, which will execute the direct mail marketing program; and eForce, which will manage the customer relationship function at the Onsource call center.
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