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Vonage And Skype Turn Up The Heat--On Each Other

The 800-pound gorillas of VoIP--Skype Technologies and Vonage Holdings--have so far been addressing different markets, but each firm is finally beginning to move into the other's space.

Vonage has primarily targeted North American public switched telephone networks (PSTN) but its paid service has been creeping into international markets. Skype, in the meantime, which is primarily used for international calling, has been making big inroads into the U.S. market.

In recent days Skype has launched its SkypeIn service, which offers subscribers the capability of having three numbers that can be called from the PSTN. Prior to that Skype users could talk free to other Skype users, but non-Skype users couldn't call Skype users directly. Vonage has begun offering its service in the United Kingdom and has offered virtual phone numbers in Mexico City for Vonage users.

"Our device is portable," said Vonage spokesman Mitchell Slepian. "People take it all over the U.S. and they take it out of the country, too." While the U.S.-based firm doesn't keep figures for international usage, there is anecdotal evidence that the Internet calling service is being used all over the world by users who configure their Vonage devices to do so when they leave North America.

Slepian noted that Vonage-to-Vonage calls are free. Vonage offers different calling plans, with the most popular is priced at about $25 a month. It aims its service to compete with U.S. PSTN providers, and claims more than 600,000 paid users.

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