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AOL launches VoIP

No price war just yet

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AOL has made its much anticipated jump into the internet telephony business, unveiling a number of calling plans designed both to keep existing subscribers and win new business in the US.

Existing subscribers get the option of unlimited local calls for $18.99 (with an introductory offer of $13.99 for the first three months); unlimited local and long distance for $29.99 a month ($24.99 for the first three months); or a global plan with cheap international calling for $34.99 a month.

New subscribers to AOL Broadband can sign up to the second option for $39.99 a month, after six months discounted at $29.99 a month.

By contrast, the leader Vonage charges $24.99 per month for its "Premium Unlimited" plan covering calls anywhere in the US and Canada, with an entry-level 500 minute bundle available for $14.99 per month. Verizon yesterday cut the tariffs for its VoiceWing VoIP service to $29.95 for unlimited local and long distance, and added an entry-level 500 minute bundle at $19.95 per month. Skype is free between computers running Skype's client software, but significantly undercuts its rivals for calls terminating at a POTS phone.

So AOL has decided, at least for now, not to get into a price war with Vonage, Verizon and AT&T.

AOL's service rolls out in 40 cities. AOL launched a Canadian service, initially only limited to the Ontario province, called TotalTalk in December.®

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