July 22, 2004 8:29 AM PDT

Verizon's Net phone service takes wing

Verizon Communications on Thursday began offering VoiceWing, its long-awaited broadband phone service expected to challenge AT&T, Vonage and other top providers of Internet phone calls.

The unlimited local and long-distance service, available nationwide, costs about the industry average: $35 for the first six months, then goes up to $40 a month, the carrier said. If a Verizon DSL subscriber signs up, VoiceWing costs $30 a month for the first six months, then $35 a month, according to Verizon.

For Verizon, Net phone plans will serve as an enticement to attract new broadband customers or keep old ones, executives said Thursday. The company has also been slashing the prices of its broadband plans recently.

"VoiceWing will bring us new broadband and voice services customers, and it will give our existing customers new ways to get the most from their broadband connections," said Bob Ingalls, president of Verizon's Retail Markets group.

Verizon's move had been expected and was perhaps hastened by cable companies, which recently embraced the same voice over Internet Protocol (VoIP) technology that Verizon is using. Also, some analysts believe that Verizon's launch was also spurred by AT&T, which recently completed its own nationwide VoIP rollout weeks earlier than anticipated.

Verizon executives, during recent appearances before the investment community, dismissed concerns that VoiceWing will steal customers away from Verizon's $60-a-month unlimited local phone service, which uses the company's traditional phone lines. One major reason, the executives said, is that the penetration of broadband, required for the VoiceWing service, has not yet penetrated enough U.S. homes to pose a real threat.

Verizon is the largest of the traditional local telephone companies to offer Net phone services, usually up to 80 percent cheaper than traditionally dialed calls, because they travel over the Internet rather than the heavily regulated and taxed telephone network. The plans also come with usually premium features.

But thriftiness has its price. Like most other broadband phone services, Verizon doesn't guarantee that a VoiceWing-routed 911 call will be directed to the appropriate emergency responders, so the company suggests maintaining an alternative means to dialing 911, such as a cell phone or traditional landline.

VoiceWing also won't work if power is out, won't support home security systems and can't be used with satellite television services, the carrier said. It works on only one phone at a time, though kits to expand its reach inside the home are available for an additional fee.

Verizon executives said the initial set of services will have "cell phone-like quality," because the calls travel over the Internet and are subject to conditions that Verizon can't control that could dim the service quality. A better-quality service that uses Verizon's own broadband network is expected to be introduced in the coming months.

 

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