AT&T to launch VoIP nationwide

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The company expects to have 1 million businesses and homes signed up by the end of 2005, said Cathy Martine, AT&T senior vice president of voice Internet services and consumer product management.

The leading incumbent Internet phone service provider that AT&T will challenge is Vonage, which has about 150,000 subscribers paying about $35 a month for unlimited local and long-distance calling throughout North America. A Vonage representative could not be immediately reached for comment.

The forthcoming AT&T service, called AT&T CallVantage, will cost between $30 and $40 a month, Martine said. Features will include the ability to forward voicemail to anyone on the Internet and a "locate me" service to let users forward calls to any or all of their phones, the company said Wednesday. AT&T had previously announced that its Internet phone service would include unlimited local and long-distance calling and international calling for a per-minute fee.

Following several start-up's leads, AT&T and other traditional telephone companies have begun letting businesses and consumers place calls that travel over the Internet rather than traditional phone networks, at a greatly reduced cost.

Called voice over Internet Protocol, or VoIP, this technology is already being embraced by carriers as a way to cut traffic costs on international and long-distance calls, and it is expected eventually to replace the public switched telephone network as big phone companies convert to IP-based fiber-optic networks. Currently, about 10 percent of all voice traffic is classified as VoIP, although fewer than 1 percent of those calls are initiated on a VoIP phone.

CallVantage plays a central role in AT&T's effort to shrug off its stodgy Ma Bell image by embracing hot new technologies.