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Is VoIP just chump change?

AT&T Chief David Dorman says he expects VoIP to be a $2 billion-a-year business, small change for his company.

AT&T's Net phone service may ultimately generate less than $2 billion a year in revenue, Chief Executive David Dorman said Friday, which is chump change to a corporate giant.

"It's not going to, like, change my life," Dorman said. "This is going to be a couple-of-billion-dollars-a-year product. But you have to put that into the context of a $25 billion-a-year company."

Dorman's sentiment is a dose of cold water on the market for voice over Internet Protocol, or VoIP. The technology, which lets people make cheaper phone calls, is expected to roil the traditional phone industry. But for now, as Dorman pointed out, commercial VoIP services are not a huge revenue generator for those companies that were expected to push the technology into the mainstream.

In the United States, about 600,000 subscribers use commercial VoIP services, in which calls travel over the Internet rather than traditional phone lines. By comparison, more than 172 million homes use traditional phone lines, which are heavily taxed and regulated, meaning that consumers pay more in fees than actual phone costs.

The hoopla surrounding VoIP stems from its affordability for both companies and consumers. Even the Baby Bell local phone companies are getting into the game. Last month, Verizon Communications, the nation's largest Bell, launched its own VoIP service, called VoiceWing.

Cable companies have taken different routes in selling voice services. Time Warner Cable has embraced VoIP and plans to sell its Digital Phone service to all of its customer regions by the end of the year. Comcast does not sell VoIP but continues to offer voice services through its network.

Dorman also on Friday hinted at additional price cuts for CallVantage, the company's VoIP service. CallVantage has already gone through one round of price cuts since its March debut. Dorman declined to say how much lower the prices will go. The most popular CallVantage plan costs $35 a month, while the industry average is between $25 and $30 a month.

"Price is the key factor right now, and that's what we're focusing on," he said.