AOL Rolls Out VOIP Service

The company makes good on a promise to enter the growing Internet telephony market with a service aimed initially at AOL members.

America Online Inc. introduced its Internet phone service on Thursday, focusing the initial release on AOL subscribers and on connecting consumers traditional phones into voice-over-IP networks.

The AOL Internet Phone Service is available in more than 40 markets in the United States and will expand to additional cities over the next few months, AOL announced.

Executives from AOL previewed the companys Internet telephony plans during last months VON conference. Like comparable services, AOLs VOIP service relies on a broadband connection to the Internet to carry voice calls.

AOLs VOIP service will compete with services from startups such as Vonage Holdings Corp. as well as the growing number of Internet telephony offerings from telecommunications carriers and cable companies.

"[This] means AOL is getting into phone business," said Jim Tobin, AOLs vice president and general manager of advanced voice services. "The PC is involved in service here, but fundamentally its a phone service."

With the initial release, outbound calls require the use of a telephone, Tobin said. Subscribers to the VOIP service receive an adapter to connect traditional phones to their broadband connections.

In later releases of the service this year, AOL expects to also offer the ability to conduct calls exclusively through a PC, a model that has been followed by startups such as Skype Technologies S.A., Tobin said. While AOL Instant Messenger allows users to conduct VOIP sessions with other AIM users, it does not yet interconnect with callers on the switched telephone network.

/zimages/6/28571.gifWill enterprises be attracted to AOLs VOIP efforts? Click here to read more.

But the AOL Internet Telephone Service does provide a range of call-control features from a PC. AOL has added a phone "dashboard" to its member software, where users can manage account settings, forward calls to other numbers such as a mobile phone, view call logs and view contact lists with click-to-dial functionality.

"It really does act as a universal controller for all my communications, and you have the choice of dealing across the realm of traditional telephony or other Internet communications," Tobin said.

When incoming calls arrive, for example, users receive on-screen alerts and can decide to take a call on their PC, forward a call or route it to voice mail, Tobin said.

AOLs VOIP service integrates presence information with AIM, so users can see whether phone contacts are also available through instant messaging, and offers voicemail. AOL also is providing Enhanced 911 coverage, which provides address information during an emergency.

/zimages/6/28571.gifRead more here about the 911 issues plaguing Vonages VOIP service.

Dulles, Va.-based AOL is offering discounted pricing for the first three months of its IP telephony service. Current subscribers can choose among a local calling plan, a plan for unlimited calls in the United States and Canada, and a global calling plan.

Following the initial discount of $5, the local plan starts at $18.99 a month and the national plan costs $29.99 a month. For international calling, the plan costs $34.99 a month after the initial discount, and includes free calls in the United States and Canada and reduced international rates.

For nonmembers, AOL is offering a bundled deal to receive both AOL Internet service as well as the Internet phone service. That combination starts at $29.99 a month for the first six months, then increases to $39.99 a month.

AOL partnered with Level 3 Communications Inc. and Sonus Networks Inc. for the services VOIP and telephony infrastructure. It is working with Linksys, a division of Cisco Systems Inc., and Netgear Inc. to offer the telephone adapter and home routing capabilities.

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