EarthLink patches in phone service

EarthLink on Thursday launched an Internet phone offering in its latest attempt to bundle paid services with high-speed access.

Called EarthLink Unlimited Voice, the product offers unlimited, flat-rate local and long-distance calling on top of the company's digital subscriber line (DSL) and cable broadband service. The package, which also includes voice mail, call waiting, caller ID, call forwarding and call return, will cost an additional $39.99 on top of a $41.95 to $49.95 monthly broadband subscription.

As previously reported, the calling service will be provided by Vonage.

The launch is the latest move by EarthLink to sell ancillary services on top of its broadband access. EarthLink, the nation's third-largest Internet service provider (ISP), has partnered with third parties to offer music, online gaming and home networking features to its broadband users.

Many Internet companies are launching premium services as a way to offset losses incurred by the collapse in online advertising dollars. Web portal Yahoo has placed heavy emphasis on growing premium services; it had 2.2 million paid users as of last December. America Online has signaled that it plans to introduce more paid services as well, now that its online advertising revenue is expected to plummet 40 percent to 50 percent this year.

EarthLink faces an overall slowdown in its dial-up ISP subscriptions, which declined 4 percent in 2002 to 4.03 million. Meanwhile, its broadband customers jumped 65.4 percent to 779,000 between 2001 and 2002.

The company hopes to continue finding ways to offer premium add-ons to its broadband subscribers.

"We're looking to see what else our customers will want to use their connections for, and for high-speed connections this is a great option," EarthLink spokesman David Blumenthal said in reference to the new phone service.