AT&T cuts cord on VoIP service

AT&T has pulled the plug on its CallVantage voice over IP phone service, according to letters from subscribers this week.

The service competed with other VoIP services like Vonage. VoIP services use broadband networks to place phone calls. These services are much less expensive than traditional landline phone services and cost between $20 and $30 per month. But even this price is proving too high for consumers who are cutting their traditional phones to use their cell phones or are signing up for voice services with their cable providers, which are bundling the phone service in with broadband and TV service.

AT&T launched CallVantage in 2004 when AT&T was still just a long-distance phone company. But the company hasn't disclosed subscribers numbers in recent years. The Associated Press reports that at the end of 2004, the service had 53,000 subscribers.

It is not a huge shock that AT&T is getting rid of the service. Last summer, the company stopped signing up new subscribers. Also AT&T has been pushing a new flavor of the VoIP service that it sells to its U-verse customers. U-verse is a new fiber network that AT&T is building to deliver high-speed broadband, TV, and phone service to consumers. Like the cable companies, AT&T is bundling the voice service with TV and broadband.

Verizon Communications also recently shut down its VoIP service called VoiceWing. It also sells an IP-based telephony service to its Fios fiber-to-the home customers as part of a triple play package.

An AT&T spokesman has said that the CallVantage service will be disconnected in phases throughout the year. And the company will send several more reminders to its customers before it shuts down the service.