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AT&T to Begin Offering Voice-over-Internet-Protocol Service in Texas

Posted on: Wednesday, 31 March 2004, 06:00 CST

Mar. 31--Cornered by frequent affronts from the Baby Bells and other businesses offering phone service, AT&T said Tuesday that it will begin offering voice over Internet protocol, or VOIP, service in Texas.

AT&T's service, dubbed CallVantage, will be offered to residential customers in the Metroplex, as well as in Austin and Houston. San Antonio is scheduled to get the service in a few weeks with other areas of Texas soon to follow. Some cities in New Jersey will also receive CallVantage.

The new service is an answer to the torrent of products offered by upstarts like Vonage and established companies such as Verizon and SBC Communications.

It offers the potential of low-cost phone service for consumers and a low-overhead service for its growing list of providers.

"No other company is offering a service like ours," said Cathy Martine, senior vice president of Internet telephony for AT&T.

Martine said that by year's end, CallVantage will be offered in 100 major markets. In addition, the company expects a million business and residential customers will have the service by the end of 2005, she said.

The CallVantage service uses a high-speed Internet connection, through either a digital subscriber line or cable modem, to allow customers to make phone calls. AT&T is offering an introductory rate of $19.99 a month for the first six months for unlimited local and long-distance calls. The service will then cost $39.99, its standard fee.

The advantage of VOIP technology is its cost, which is a benefit to phone service providers. But it also has attributes that make it attractive to customers. AT&T said the service will allow users to access standard features such as call waiting and call forwarding. It will also offer features such as personal conferencing, which allows callers to connect up to nine participants. A do-not-disturb feature allows consumers to be screen calls.

Martine said AT&T decided on Texas after a detailed study unearthed the region's high rate of broadband penetration. Martine estimates that 20 percent of Texas residents have some form of broadband connection.

"Texas is a very opportune market," Martine said.

The company has offered VOIP service to its business customers since 1997.

AT&T is taking a chance on how well CallVantage will be accepted by residential customers. Two factors could prevent the service from meeting the company's rosy projections: growing and fierce competition, and regulation.

Verizon, SBC and a host of smaller companies either offer the technology or are in the early stages of rolling it out. New Jersey-based Vonage reported on its Web site that it has 125,000 lines after three years of service.

Verizon will offer VOIP for residential customers beginning in the second quarter of this year, said William Kula, a company spokesman.

The regulatory environment could be just as threatening. The lure of VOIP is its relative low cost. A chunk of that cost is a result of having no federal government mandated fees on the service. Although regulators are now hesitant to levy fees, the status quo could change.

"Yes, regulation could stunt its growth," said Blaik Kirby, senior vice president of Adventis, a telecom business strategy consultant. "But if regulation slows down CallVantage, there will be a host of others that will also feel the effects."

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To see more of the Fort Worth Star-Telegram, or to subscribe to the newspaper, go to http://www.dfw.com

(c) 2004, Fort Worth Star-Telegram, Texas. Distributed by Knight Ridder/Tribune Business News.

T, VZ, SBC,

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