Montreal's South Shore has become the beachhead as a large Quebec cable company enters the phone business.

Videotron, owned by media giant Quebecor, on Monday said it was the first big cable company to offer residential phone service over its wires.

More than 300,000 South Shore residents have access to the service; so far, 2,500 households have signed on.

The move is a direct challenge to Bell Canada, which has a near-monopoly on residential services in Ontario and Quebec.

The cable and phone companies have been moving into each other's turf, driven by technology – especially internet telephony, known as Voice over Internet Protocol – and the customer's desire to deal with a single provider for phone, internet and cable-TV services.

"Market studies conducted by Videotron clearly show that customers want one-stop shopping," the company said.

Like other converging communications companies, Videotron is offering a cut rate starting at $15.95 a month on the phone service for customers who already take two other company services.

Subscribers to Videotron's service can keep their telephone number and equipment and will be able to get all the standard extras, such as call display, voice mail and access to assistance services like the 911 emergency number.

While other cable companies have opted for internet systems, Videotron is using a mixture of internet and traditional connections.