SBC offers cheaper VoIP service

SBC Communications on Thursday began selling a less-expensive version of Internet telephone service that requires businesses to buy only a fraction of the necessary equipment.

The carrier's PremierSERV Hosted IP Communication Service includes all the gateways and servers businesses needed to create a voice over Internet Protocol (VoIP) telephone system that reaches any kind of telephone. The only set-up expense is for VoIP handsets or VoIP adapters for traditional landline telephones, an SBC representative said.

PremierSERV Dialing plans start at $29 per line, which includes unlimited calling to any telephone that uses traditional phone networks within a limited geographic area. For $39 a month, SBC offers an unlimited number of calls to anywhere in the United States.

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The plans rely on VoIP, which is a less-expensive alternative to traditional telephone dialing because the calls use the Internet and avoid telephone company access fees. About 10 percent of all telephone calls now rely at some point on VoIP, and that percentage is expected to skyrocket during the next decade.

SBC is battling a crowded field of Net telephony providers including Net2Phone and Fujitsu that are already selling "hosted" VoIP services to businesses that can't afford the usually steep network set-up costs.

Business spending on hosted VoIP services is expected to rise dramatically from the $46 million in 2001 to $36.5 billion in 2008, according to market projections from Allied Business Intelligence (ABI).

ABI senior consulting analyst Julia Mermelstein said SBC's hosted VoIP offering is no surprise; nearly every major traditional phone company is testing a version of the same service. She added that SBC has the largest service area of any current provider, giving it an advantage over competitors.

"Those providing service in the past have been limited geographically," she said.