Voip Providers
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VoIP providers face price war
Internet telephony companies already offer major cost savings over traditional telephone services, but now they’re challenging one another for the title of cheapest of the cheap in an increasingly brutal battle for customers.
After nearly seven years on the fringes, so-called VoIP (voice over Internet Protocol) technology is ready to move into the mainstream. But as the market has matured, it’s drawn a crowd of competitors, tempting some into a dangerous game of chicken.
“A lot of people want to grab users, even if you don’t make money,” said Mario Bustamante, chief executive of broadband provider DSLi, which last month launched a stripped down $10-a-month VoIP plan. “It’s a little like early DSL mentality, where people are going out and losing their shirt just to get eyeballs.”
Some VoIP services are free, but they generally work only for calls between computers that have the same software installed. The current price war is erupting among VoIP providers with services that let callers seamlessly connect from an ordinary telephone handset to any phone number around the world.
Two years ago, such plans offering unlimited local and long-distance dialing within the United States to residential customers typically cost a flat rate of $45 a month or more. Now some providers are selling these services for less than half that price, although the industry average remains significantly higher.
Few plans include flat rates for international calls, which can typically be purchased by the minute at a discount to traditional phone carrier rates.
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