Friday, May 07, 2004

AT&T plans overseas drive for VoIP
By Paul Taylor in New York
Published: May 3 2004 19:26 | Last Updated: May 3 2004 19:56 / Business / US:

AT&T, the US long distance telecommunications carrier, is planning to launch its consumer broadband VoIP (Voice over Internet Protocol) service in overseas markets, possibly including the UK and other European countries.

The company launched its consumer VoIP service, dubbed CallVantage, in the US at the end of March. The service enables consumers with a high-speed cable or DSL internet connection to make and receive calls over the internet using an ordinary phone.

Vonage, one of the pioneers of broadband VoIP services in the US, has also announced plans to expand overseas. It has begun to roll out its flat-rate service in Canada and plans to launch its service in the UK and Switzerland later this year.

Two months ago the small New Jersey-based company raised an additional $40m in a financing round led by Britain's 3i group to fund its international expansion.

The launch of broadband VoIP services by both Vonage and AT&T could put pressure on incumbent phone carriers such as BT in Britain, which launched its own consumer broadband VoIP offering in December.

While AT&T's plans are at an early stage, AT&T planners are understood to be examining options to launch the discount phone service in countries where broadband penetration rates are relatively high and the market opportunities for VoIP services are thought to be large.

David Dorman, AT&T's chairman, describes CallVantage as "a global service offering" and has signalled AT&T's intention to launch the service overseas. "We are examining the possibilites," he said.

The AT&T chief executive sees the opportunity to launch the service in markets outside the US where AT&T has the necessary telecommunications licences as an way to expand AT&T's revenues at a time when the company faces highly competitive and difficult market conditions in the US.

AT&T has telecoms licences in about 55 countries and is understood to have already approached regulators in some of them about launching the service. The service could be particularly attractive in markets where domestic call rates are high.

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