How low can you go?

So what's VoIP Inc. up to? The two-year-old Net phone service provider will only say it's soon going to offer "free VoIP to consumers for the first time."

That's as much direction as telling a lost motorist to "turn right at Arizona." But hints dropped since February indicate that VoIP Inc. may challenge conventional wisdom about how much you can charge for phone service and still stay in business. So far, $15 a month seems to be as low as any phone service provider is willing to go.

Blogger Mark Evans thinks that "free" could mean not charging at all for calls to cell or traditional home phones. Vonage, without the monthly bill, as he puts it. It's inevitable, he argues, given VoIP's efficiencies compared to traditional circuit switched telephony. If not VoIP Inc, perhaps another newcomer a few months or years down the road.

There are already examples of VoIP providers giving away long distance minutes. In 2003, Labatt Brewery used VoIP to offer free long-distance phone service to thousands of residents of Ontario, Canada. There was just one catch: every time any of the 1,000 new subscribers a day dialed out, they had to listen to a 10-second Labatt commercial. "It's not as cheesy as 'This call brought to you by Labatt,'" a company spokesman said.

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About the author

    Ben Charny
    covers Net telephony and the cellular industry.
     

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