Yes, but can your VoIP service do this?

"We have a saying: If it ain't broke, add more features," Hossein Eslambolchi, chief technology officer at AT&T, said at the Web 2.0 Conference here.

Although Vonage and AT&T are still locked in a price war, the two companies are separately planning new features to try to stay a step ahead of each other. Videoconferencing is "a big focus now" for AT&T's CallVantage Net telephony service, Eslambolchi said. Meanwhile, Vonage is planning to use MP3 playback technology for voice mail soon, according to company CEO Jeffrey Citron.

Net telephone technology uses the Internet, rather than heavily taxed phone networks, to let people place calls. As a result, calls can be much cheaper but lower in quality than traditional phones. After years of developing the technology, known as voice over Internet Protocol (VoIP), leading telephone operators are now introducing it to mainstream consumers.

Vonage and AT&T expect the new features to help them gain customers when the prices of calling plans eventually bottom out. In late September, both AT&T and Vonage cut the monthly rate for their unlimited calling plans--AT&T to $30 a month; Vonage to $25.

Many of the new features are being developed in-house, the two executives said.

That's bad news for application service providers like Tellme Networks that have been waiting for Net phone technology to take off, said Mike McCue, co-founder of Tellme. Now that VoIP is ripe for a mass-market breakout, carriers aren't buying their goods, he said.

McCue and others say VoIP carriers should let developers sell their wares directly to customers, something cell phone service providers already do, which has created a nearly multibillion-dollar-a-year market for software downloads.

"The people building Net phones are tinkering as if they were old phone companies," McCue said.