Net2Phone executives say that at the end of May customers will be able to choose a 1-800 phone number or a phone number from any area code they like, regardless of where they live. People will also be able to take incoming calls. Previously, Net2Phone customers could dial out but could not answer incoming calls.
"The phone number we assign you doesn't have to be tied to a geography," said Joe Morris, Net2Phone's senior vice president of product strategy. "If you are in New York, there's no reason we can't give you a California number, so if you have a relative in California, they can call you at the cost of a local call."
The features will be available to high-speed Net access customers who buy devices that Net2Phone and network equipment maker Linksys build, which allow consumers to make low-cost, long-distance calls using Net2Phone's Internet-based voice networks.
The new services are part of Net2Phone's latest push into the high-speed Internet access market. To attract more customers and to help pump up sales, the company, as well as competitors such as Deltathree and Phonefree.com, are targeting subscribers of high-speed Net access.
In the past, people have had to use their PCs to make their Net-based phone calls. But the Net-based phone companies are starting to bundle phone services with cable operators and DSL service providers, as well as network equipment makers that build routers and other home-networking devices.
Yankee Group analyst Aurica Yen said the broadband market is a good market for the Net phone companies to tackle.
"This brings in a whole different category of consumers," Yen said. "People with broadband now are still few and far between, but they are technology sophisticated, have higher levels of income, and spend more on communications products and services."
Net2Phone, an Internet telephony pioneer, offers cheaper phone rates than traditional phone companies. While domestic phone calls through PCs are free, Net2Phone charges about 3.9 cents per minute to consumers who make domestic calls using regular phones. International rates start at 7.9 cents. All calls travel through Net2Phone's private, Internet-based network.
The company's biggest partner thus far is with Linksys, which earlier this year released a router with Net2Phone technology built in. The two companies announced at this week's Network+Interop conference in Las Vegas a new adapter that allows people with older Linksys devices to make calls using Net2Phone's service.
Linksys, which competes against 3Com, Intel and others in the emerging home-networking market, makes a router that is an add-on to a cable or digital subscriber line (DSL) modem. The product allows people to link their computers throughout the home, so they can communicate and share the high-speed Net connection. Linksys' latest router released earlier this year includes a built-in phone jack that allows people to plug in a regular phone to make Net-based phone calls.
Net2Phone also struck deals with cable modem maker Motorola, set-top box maker Scientific Atlantic, and chipmaker Broadcom, which will build Net2Phone's technology into processors used in modems, routers, and other home-networking devices.
The routers make it simpler for people to make Net phone calls--and it gives them better voice quality than if they used PCs with a dial-up modem, said Joe Morris, Net2Phone's senior vice president of product strategy.
"There's a certain segment of the population that makes phone calls from PCs. But there are other people out there who are used to traditional phones," Morris said. "With cable and DSL emerging, it's an opportunity for us."
The success of the Net phone companies depends on how fast broadband is adopted. According to various estimates, only about 5 percent of Internet users have a broadband connection, offering huge growth potential for the market. Jupiter Media Metrix expects 11.8 million DSL connections in 2005, up from 1.2 million in 2000.
Net2Phone executives say the company in six months to a year will offer new software for routers and other home-networking devices, such as voice recognition features, that will allow people to call others simply by stating the person's name. The offering will also allow people to check their voice mail, stock quotes, and other Web information over the phone.