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Saturday, September 03, 2005
  big impact- Microsoft to offer Internet telephoning
Microsoft has sent a shudder through the traditional telecoms industry when it announced plans to develop and Internet telephone service, allowing calls from computers to fixed line and mobile phones and other PCs.

The software company is bolstering its expertise through the acquisition of Teleo, a small San Francisco firm that makes Voice-over-Internet Protocol (VoIP). Microsoft intends to integrate the technology into its systems and develop services allowing consumers to make calls from their desktop by the end of the year.

Service offering cheap phone calls via the Internet have been around for a decade of so but the technology is only now beginning to attract big name firms and gain momentum. Yahoo! recently bought Dialpad, another firm that allows users to call over the Internet to traditional phones, with the aim of adding the software to its online portal.

Google has launched Goolge Talk, a more limited offering that allows users to send instant messages and hold live voice conversations with other PC users. AOL has also announced a voice service.

VoIP is cheaper than making a traditional phone call because it uses the Internet, sending the voice in the same was as e-mail or WebPages.

There are an estimated three million people using VoIP services in the biggest market, the United States. IDC, the telecoms consultancy, forecasts that will rise to 27 million b7 2009, putting traditional telephone firms under intense pressure.

Skype is the biggest existing player in Internet telephony. It offers free calls to other Skype software users. The company says that 51 million people use its free service while 2 millions have signed up to pay for connections to traditional phones.

Microsoft already uses VoIP technology in its MSN messenger but does not yet allow calls form PC to fixed line or mobile phones.

The Teleo software was designed to facilitate “click through” dialing of any telephone number that appears on screen, either through a website, via search results or e-mail. It offers calls at 2 cents a minute to most numbers including from the United States to Britain. Microsoft said the software would be integrated into its MSN service, which has 170 million users worldwide.

Some of the traditional telecoms companies have begun fighting back. In Britain, BT is offering customers cheap international calls through an online service called BT Communicator

-Guardian Newspaper Ltd-

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