America Online is expected to launch an Internet phone service in the United States next month, leapfrogging rivals in a fast-growing market as it seeks to evolve from an also-ran provider of dial-up Internet access to a broadband services powerhouse.
Like Yahoo and Microsoft, AOL already offers voice chat on PCs as a free feature of its instant messaging services. AOL's new phone service, by contrast, will take a different path, charging customers a monthly fee to make calls over the Internet using an ordinary handset and a small analog-to-digital telephone adapter.
AOL has been testing a U.S.-based phone service with volunteers since last summer, and it launched a similar service in Canada in December. The online giant plans to introduce its VoIP, or voice over Internet Protocol, product to U.S. subscribers in mid-March and then offer it to nonmembers later this year, according to sources familiar with the plan.
Sources said the cost of AOL's service will be competitive with other VoIP offerings in the market, where one low-cost provider, Vonage, charges $24.99 a month for unlimited local and long-distance calling. The AOL service will cost less than the $40 Internet phone service offered by corporate cousin Time Warner Cable, the sources added.
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