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Vonage Cuts Prices For Internet Calling

Internet phone company Vonage Holdings on Monday cut the price of its unlimited calling plan by 14 percent, in an attempt to attract as many customers as possible in an increasingly competitive market.

The Edison, N.J., company, which is adding 25,000 new Internet phone lines a month, dropped its price for unlimited calling to $29.99 from $34.99. Vonage currently has 155,000 phone lines.

The company insisted it was not launching a price war in a market that is just starting, saying that the price cut reflected its decreasing costs in doing business.

"You need more competition in the space to have a price war," Louis Holder, executive vice president of product development for Vonage, said. "It's too early to compete on price."

Nevertheless, Vonage made the move about six weeks after AT&T announced its CallVantage plan, which will cost $19.99 a month for the first six months, jumping to $39.99 a month after that. AT&T plans to offer its unlimited plan in 100 cities nationwide by year end.

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