AOL Marches Toward VOIP Rollout

Light Reading
News Analysis
Light Reading
2/4/2005



AOL, the Internet division of Time Warner Inc. (NYSE: TWX), has been testing its VOIP service for months, and the service's debut may be only weeks away. One source familiar with the company's plans says the targeted launch date is March 16. Another source, though he couldn't confirm the date, notes that there has been an upturn in softswitch deployment activity at AOL recently, which suggests AOL is very close to a launch.

AOL, naturally, is tight-lipped as to the specifics of its VOIP service. ”We are currently in beta testing of a consumer VOIP offering,” says AOL spokesperson Anne Benteley, who wouldn't confirm a launch date.

AOL's VOIP offering, as reported earlier by Light Reading is riding across Level 3 Communications Inc.'s (Nasdaq: LVLT) network, the same carrier that powers residential VOIP services offered by Skype Technologies SA and other companies (see Skype Names Carrier Partners and AOL Ambles Into VOIP).

Reaction to the service from beta testers is mixed, based on user posts to Broadband Reports and other message boards.

“I have to say that the AOL VOIP service is rather nice,” writes one tester.

AOL needs a "rather nice" add-on service to keep users from defecting to other ISPs. But VOIP gives AOL more than just a feature. It makes the service more attractive to carrier partners who need to sell something beyond a basic high-speed data connection (see VOIP Fueling Cable Growth).

What's more, it's popular with consumers. In a May 2004 survey conducted by Heavy Reading, VOIP garnered the most support from respondents as the most important new service in 2004, with triple-play coming in a close second.

And, with Vonage Holdings Corp. and other VOIP upstarts marketing their VOIP services like crazy, a widely known consumer brand like AOL could make some big waves -- both by buying more VOIP equipment to support its 4 million-plus broadband subscribers, and eliminating a competitor or two along the way.

— Chris Somerville, Senior Editor, Next-Generation Services

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