Net2Phone vies for European connection

U.S. Internet phone service provider Net2Phone has launched a new challenge against rival Vonage, targeting smaller cable and DSL broadband providers, particularly those in Europe.

Net2Phone for the first time is making available a commercial phone service using Session Initiation Protocol (SIP), a company representative said Tuesday. SIP is widely regarded as the cornerstone of Net-based phone calling.

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The new service will be aimed largely at small European DSL (digital subscriber line) and cable providers--those with less than 50,000 customers--that couldn't otherwise afford to resell more expensive phone services using a standard called PacketCable. The service will also target Latin American carriers, a Net2Phone representative said.

Net2Phone's move comes as its chief rival, Vonage, is readying its own European entry. Vonage spokesman Mitchell Slepian said Tuesday that Vonage will begin selling broadband phone plans in the United Kingdom, Switzerland and other parts of Europe sometime this year.

"We welcome the competition," Slepian said.

The two broadband phone service providers have been enjoying a modicum of success in the United States, largely because their phone plans are $35 a month, or about a third less expensive than traditional dialing. Europe could be an even bigger market for the companies. Landline phones are even more expensive there, so the savings from using a broadband phone provider would be even more dramatic.