Canada’s largest cable companies are expected to move further into the residential telephone market this year, according to Moody’s Investors Service, which is predicting 52% growth in the cable phone market over the course of 2007.

Cable giants such as Rogers and Shaw will aggressively roll out their digital telephone services in new markets throughout the country, predicts Moody’s analyst, Darren Kirk, and could have a combined customer base of up to 2.2 million by December.

The Moody’s report predicted that this growth would also fuel demand for cable television and broadband offerings, which are bundled with digital phone services for a discount. The cable operators are having their advantage by being able to offer this triple-play wireline bundle, Mr. Kirk explained.

Telephone companies like Telus and Bell Canada will be quick to retaliate, however, Moody’s predicts. As the federal government eases regulations on the landline phone market, incumbent carriers are creating highly competitive triple- and quadruple-play bundles of their own, setting the stage for an industry-wide price war in the coming years.