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Comcast cautious about VoIP upgrade

Despite being "more bullish than at any time" about its Internet phone service, the cable company will wait until at least 2004 to complete a much-anticipated upgrade of its technology.

Despite being "more bullish than at any time" about its Internet phone service, Comcast will wait until at least 2004 to complete a much-anticipated upgrade of its technology, Chief Executive Brian Roberts told analysts on Tuesday.

Plans to add voice over Internet Protocol (VoIP) are, for now, taking a backseat to more immediate Comcast needs like selling high-speed Web services to fend off intense competition from cable and telephone providers, Roberts told analysts attending the Goldman Sachs Communacopia XII conference in New York.


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Roberts' remarks signal Philadelphia-based Comcast's ongoing reluctance to take the technological step-up from the bandwidth-hogging telephone switches it uses to sell phone services to 1.2 million people. Analysts believe cable companies in general, and Comcast specifically, can sell more voice plans and features such as caller ID by upgrading to less bandwidth-intensive VoIP networks.

Roberts said that Comcast will continue to take its time wrestling with the decision. "We're more bullish than at any time for VoIP," Roberts said. But "we aren't ready to come out today and announce our plans." He said that instead the company will be "testing the technology and its profitability in 2004."

Time Warner Cable is the only major cable provider to launch a VoIP service, which for now is available in just Portland, Maine. Time Warner Cable plans a slow expansion, said Don Logan, chairman of the company's media and communications group, during the same conference Tuesday. The provider plans to expand into four more markets by the end of this year, he said, but he didn't say which ones.

While still just a trickle, early defectors to VoIP represent the vanguard in a trend that some analysts believe could soon roil the communications industry. Independent VoIP providers such as Vonage and 8x8 are beginning to steal consumers from traditional phone operators with flat-rate VoIP plans that cost between $20 and $40 a month for local and long-distance calls.

But as Roberts showed by his remarks, even as momentum for VoIP mounts some of the biggest cable companies believe the technology isn't yet ready for the masses.