The strength of ICG Netcom,the brand name for products and services from ICG Communications, lies in the domestic market, while VIP Calling has thus far specialized in an international IP-based buildout. Both providers have relied on traditional circuit-based networks to carry calls outside termination points in these respective geographies. Now they can rely on an IP-only approach using equipment that treats voice as an IP "packet," potentially resulting in lower prices for customers.
The two companies are part of a larger trend to offer discounted long-distance rates through the use of technology classically implemented in data networks. The lower cost of sending voice signals as data traffic is enticing a slew of new telecommunications upstarts to enter the IP telephony market, imbued with a sense that technology can allow them to compete against multibillion rivals like MCI WorldCom or AT&T.
"It's an example of taking two networks and making them work together," said Gordon VanderBrug, executive vice president for VIP Calling. "It reduces our cost for termination in the U.S."
VIP Calling provides international wholesale bandwidth to third parties, who then resell IP telephony services to customers.
Both companies use compatible equipment from Cisco Systems, which allowed the duo to integrate their networks, according to the companies.