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Net2Phone unveils new Net-phone service

The company's VoiceLine technology lets people with high-speed online access make Net-based phone calls--a potentially cheaper alternative to calling via traditional carriers.

Net2Phone launched a new service Wednesday that allows consumers to make phone calls over the Internet using their regular phones.

The company's VoiceLine technology lets people with high-speed Internet access make Net-based phone calls, a potentially cheaper alternative to making calls through traditional phone carriers, such as AT&T, Sprint or WorldCom.

To make Net-based phone calls, a consumer simply plugs a regular telephone into a new Net2Phone device, then connects that device to a cable or DSL (digital subscriber line) modem.

Net2Phone's new service makes it simpler for its customers to make Net-based phone calls. Previously, its customers had to make phone calls via personal computers or with calling cards.

Net2Phone, an Internet telephony pioneer, competes against Cisco Systems, Dialpad Communications, Deltathree and others in the race to provide Net-based phone services to people with broadband Net access. Analysts have said the market for Internet telephony over high-speed Net connections has good potential because the number of consumers with broadband access continues to grow.

Because Net2Phone does not yet provide 911 emergency services, Net2Phone executives say they are aiming the new service at consumers who are looking for second phone lines in their homes.

The subscription-based service will be available to customers who buy devices built by Net2Phone and network equipment maker Linksys. The devices allow consumers to make Net-based phone calls over Net2Phone's Net-based voice network.

Meta Group says that everyone must be vigilant regarding voice-quality issues.

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Net2Phone will charge as little as $9.99 per month for 250 minutes of phone calls, which averages out to 4 cents per minute. At the higher end, the company plans to charge $49.99 per month for 1,700 minutes, which averages out to 2.9 cents per minute. International phone calls will be charged separately, but will start at 7.9 cents per minute.

As earlier reported, Net2Phone's customers will be able to choose a 1-800 phone number with the service. People will also be able to take incoming calls. Previously, Net2Phone customers could dial out, but not answer incoming calls.

Cisco and Dialpad recently announced similar devices and are partnering with DSL and cable operators that want to generate more revenue by offering Net-based phone services. For Cisco, the device means getting deeper into the market for Internet telephony equipment, where it competes against Lucent Technologies, Nortel Networks and others. And the devices allow Net-based phone companies such as Dialpad and Net2Phone to capture new customers in the Internet telephony market.

Bryan Wiener, general manager for Net2Phone's communications services, said Net2Phone is providing 1-800 numbers to every customer in the United States. People in New York City, however, will be allowed to choose a number with any area code they want, an option that will be made available throughout the United States in the coming year, he said.

Over the summer, Newark, N.J.-based Net2Phone also will offer a voice-recognition service that allows people to make phone calls simply by stating the person's name on the phone, Wiener said. The service will also allow customers to check the weather or stock quotes over the phone.