BellSouth Launches Residential VOIP

BellSouth Corp. (NYSE: BLS) has launched a residential VOIP service by reselling 8x8 Inc.'s (Nasdaq: EGHT) Packet8 service, Light Reading has learned.

The service, called BellSouth Digital Phone Service, has already been launched in one market -- Gainesville, Fla. -- and will be rolled out in more areas in the coming weeks, according to a BellSouth sales support team member. The service includes features such as caller ID, call waiting, voicemail, and the like.

The service will eventually be marketed to BellSouth's FastAccess broadband customers throughout the whole of the RBOC's service region, offering unlimited calling in the U.S. and Canada for $29.99. The carrier also plans to extend the service to small business users for $59.95 per month.

The FastAccess service costs between $24.95 and $46.95 per month, depending on the speed of the connection.

In an email response to questions, BellSouth said: "We are broadening our portfolio of consumer services with BellSouth Digital Phone service. This new service is another example of our commitment to provide customers with the greatest choice when it comes to their communications and entertainment services. We expect customers to continue to benefit from traditional telephony bundles, as well as next generation offers. Our goal is to meet a variety of communications needs across our customer base."

8x8 spokesman Richard Medugno said his company had no comment to make at all, and then hung up.

BellSouth is currently developing its own broadband voice service, with Lucent Technologies Inc. (NYSE: LU) as its systems provider, but that's thought to be at least a year away from being ready. (See Lucent Lands BellSouth IMS Deal.)

In the meantime, the carrier is coming under competitive pressure from the likes of Vonage and cable operator Cox Communications Inc. (NYSE: COX), and likely felt the need to offer a VOIP service to its broadband users as soon as possible.

More than a year ago, BellSouth was reselling Vonage Holdings Corp.'s VOIP service in a limited test called "DSL Talking," a Vonage spokeswoman tells Light Reading. "I don't really have a reaction to them selling VOIP -- we welcome them to the marketplace," she says. "We already compete with 8x8 and other RBOCs who are selling their own form of VOIP. Now, BellSouth has been added to that list."

8x8's stock is up 22 cents, a hefty 18 percent, to $1.44 today. BellSouth's share price is up 22 cents, less than 1 percent, to $27.64. — Ray Le Maistre, International News Editor, Light Reading

— Mark Sullivan, Reporter, Light Reading, contributed to this story