April 28, 2005 11:07 AM PDT

Comcast dials in more phone markets

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Raising the stakes in the highly competitive telephony market, cable operator Comcast announced on Wednesday that it will significantly expand its telephone service in the next few weeks.

Comcast plans to introduce its Digital Voice in Boston and Hartford, Conn., by the end of May, and in Chicago and Portland, Ore., by June, Comcast executives said during a conference call Wednesday.

Comcast also said it soon will introduce a combination broadband and unlimited local and long-distance phone plan that will sell for about $70 a month.

The moves are in line with Comcast's ambitions to make Digital Voice available by year-end to 15 million homes in the 20 markets its network touches, a nearly seven-fold increase in the service's present reach. The company said on Wednesday it is ahead of schedule in rolling out the service.

Comcast and other elite U.S. cable operators have been challenging the Bell phone companies' dominance in the home phone market for several years with their own steeply discounted bundles of voice, video and phone services. The Bells (Verizon Communications, SBC, BellSouth and Qwest) still dominate the market, with about 113 subscribers versus 3 million to 5 million estimated Internet phone users. But with cable giants such as Comcast now more fully engaged in the pursuit of phone customers, the number of Net phone users will soar to 27 million by 2009, market analyst IDC predicts.

Comcast's expansion into the phone service market had been hindered by the fact that it relied on the same type of bulky, inefficient and expensive circuit-switched phone gear used by the Bells. Last year, however, it embraced the much less expensive and more nimble voice over Internet Protocol (VoIP), which has allowed the company to more quickly expand its telephone system, executives said.

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Ain't technology cool
There's a reason I'm a techno-geek - I just love new stuff.

But what's also fascinating is what this will do to the conventional business models. Will we see flat rate long distance ? Will we see flat rate monthly fees for ALL phone services - after all, my internet access is a flat rate, no matter how many hours I'm using bandwidth. I can hook up umpteen PC's & download movies 24X7, from Islington, Indonesia or Indiana, why isn't my phone service the same ?

My First TV prediction just came true, with a 100% on-demand cable TV service starting up in SoCal. Now just wait & see if they go to 100% micro-charge PPV.

Technology breaks up the old way of doing business & the smart people change their businesses to match - we still await a resolution to file-sharing of intellectual property. But it'll happen & then we'll have a whole new way of getting new stuff - Cool !
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