DirecTV to let customers make calls

DirecTV is getting into the phone business.

The satellite broadcaster will start offering phone services by the second or third quarter of next year, according to David Allred, vice president of broadband services for DirecTV's broadband subsidiary.

The company intends to offer what's known as "voice over IP" (VoIP), which uses the Internet instead of a telephone company's network to send and receive telephone calls. VoIP is powering many of the prepaid phone cards now on sale in Europe and is also used in a growing number of offices in the United States.

The new phone service should be available by early 2003, he said. Every modem given to new DirecTV broadband subscribers after September will have this capability built in. DirecTV is embedding technology from Texas Instruments to make that happen.

Allred said the company intends to market the service as a cheap alternative for a second home phone line, rather than aggressively sell it to replace the traditional landline. He said the company's main reason for doing so is that it thinks "most people will still maintain their existing and primary phone line."

The company's 100,000 broadband subscribers who want to get the new service will have to get a new modem, which Allred said the company will likely upgrade for free.

He said the modems will work with any cordless or landline phone that plugs directly into the modem. Cellular phones and combination personal digital assistants and phones won't work on the service.

The same devices will soon be able to offer call forwarding or caller ID, Allred said.

DirecTV is a unit of Hughes Electronics, which has agreed to merge with rival satellite telephone provider EchoStar Communications.