Net call phone war drives down prices

Low cost, and even free long-distance and international phone calls are now available through the internet, but voice quality might be the price to pay.

US software developers Hear Me and Go2Call are currently talking to UK telcos about launching services in the next year, while European outfit PC2Call launched last week. All three allow internet users to make local and national phone calls from PC to phone, or from PC to PC at low prices.

PC2Call offers subscribers free calls to UK landlines from any PC in the world until 30 June. The company charges PC-to-phone calls to other countries at 'discounted' rates.

Go2Call is refusing to give details of its UK service before the official launch on 1 June, but it already offers the service in the US. International calls from the US to the UK cost anything from 14 cents a minute for a one-off $10 charge, to nothing for a $30 start-up fee and $30 monthly tariff.

Hear Me says its European national and international rates have not yet been determined, but that would it would be similar to its US arrangements. In the US, the company charges as little as five cents a minute for long-distance calls, which appear as part of the user's normal phone bill.

The price savings are possible thanks to technology which allows phone calls to travel the majority of the way to the receiver through cheaper internet networks before switching back through gateways to the telephone network close to their point of destination.

However, while calls for PC owners may be much cheaper, users have to wear either a headset or use a PC microphone and speakers. Moreover, the voice quality of such calls, although much improved on earlier systems, is still dependent on other factors.

Margaret Hopkins, principle consultant at Analysys, told vnunet.com: "Voice on IP can be as good as a normal phone line if your internet service provider is good enough.

"If they are good enough, and only if, then really voice on IP suffers more because of its image than because of any actual technical limitations."

Whatever the current limitations of the technology, it seems certain that PC-to-phone calls will drive down the cost of dialling for PC owners in the near future. According to its evangelists, it will eventually change the way everyday calls are sent around the world.

Mike Hewitt, vice president of worldwide sales at Hear Me, said: "The voice over IP market is set for huge growth. Currently, voice traffic over IP represents only about two to three per cent of all voice traffic, but by the end of this decade it will represent 99 per cent."