AT&T Moves Into The VoIP Market

AT&T, which has offered limited VoIP service to business customers for years, jumped into the Internet phoning market Thursday, announcing a major initiative to offer the service to its consumers and to its business customers on a worldwide basis.

The company is positioned to take advantage of VoIP because it already owns a worldwide IP backbone and claims it has been carrying more IP traffic than any other provider.

As if to answer AT&T, British Telecom announced that it, too, will offer VoIP to its customers. Like AT&T, BT has seen its business slowly eaten away by smaller competitors. In the U. S., Qwest reported that it has delivered VoIP phones and adapters to a few hundred of its DSL customers in Minnesota. The former regional Bell claims it is the first among its former Bell siblings to actually put the service in operation.

The move by AT&T will impact an already-roiling VoIP market. All of the regional landline companies and most of the nation's cable providers offer Internet phoning in one form or another. In addition, a pack of lean start-ups has been nibbling away at the larger firms' traditional landline telephone service.

"Unlike many of our competitors, who are constrained by geographic reach or broadband access technologies, our voice over IP offer will be available in cities across America to customers with different kinds of broadband access," AT&T CEO David Dorman said in a statement. "AT&T has invested heavily in its network and networking capabilities to provide -- over our own IP network, or any combination of IP and public networks -- advanced voice services and features (for) business customers."The firm said it already serves "hundreds of businesses with its managed VoIP services." AT&T added that it will expand its VoIP business features and begin delivering Internet phoning to its customers outside the U. S. The company's 21 global Internet Data Centers are well-situated to carry out the company's new drive. AT&T, which said it already carries one petabyte a day over its IP network, noted that it has been selling VoIP in a limited fashion to business customers since 1997.

The move into VoIP consumer markets is a new one. AT&T said it has been testing VoIP consumer service in three states and is satisfied enough with its offering that it will begin marketing it to consumers in the first quarter of 2004. Dorman appointed Cathy Martine, a senior vice president in the company's Consumer Division, to head up what the company called "VoIP efforts across AT&T Labs, Consumer and Business Divisions." The VoIP announcement came one week after Dorman appointed William Hannigan as president of AT&T.