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AT&T Rolling Out VOIP

Boot Camp feature for Thursday, March 11, 2004

AT&T prepares to roll out voice over IP. Bloomberg Boot Camp, a report on today's technology. The competition is about to intensify in the telephone business once again. There are start-ups and cable companies offering telephone services over broadband Internet connections. Now AT&T is about to introduce voice over Internet protocol service…initially in about a hundred markets around the country. Cathy Martine is the senior VP in charge of AT&T's Internet telephony service…

"The advantages from a customer point of view are basically cost savings. At the simplest level, this service provides local and long distance and advanced applications with mobility. And that's key in the context of customers capabilities."

The phone becomes a device that communicates via the Internet…allowing Web access to voice mail….and allowing you to have your phone number travel with you between home and office…or to anywhere in the world where you can establish a broadband Internet connection. The technology is already being adopted by some businesses around the country. Consumer service typically costs 30 to 40 dollars a month for unlimited local and long distance calling. About how quickly people will sign up, Martine says…

"The business in the short term we see as small as it relates to the actual customers themselves. Because just 23 or 30 percent of the population probably has broadband today, so we don't expect every one of those customers to convert."

The numbers will grow, however. There are some obstacles…and competitors who plan to fight the phone giant. More on that in an upcoming report. Bloomberg Boot Camp, I'm Fred Fishkin.