MCI to Test Consumer VoIP Service

MCI last week quietly began a small trial of a voice over IP (VoIP) service for residential subscribers. 5,000 customers in select markets were given the opportunity to test the service, and could pick from either 500 minutes for $19.99 or unlimited calling for $29.99 per month.

At the end of the trial, MCI will make a decision whether such a VoIP phone service is viable, company representatives told Reuters.

The company says the program has nothing to do with the Verizon merger and is proceeding indenpendently of the consolidation. MCI was bought by Verizon after a long drawn out battle with Qwest for $8.6 billion in cash and stock.

The possible addition of VoIP to MCI's lineup comes at a time when revenues from traditional consumer services are shrinking. Companies like AT&T and Verizon are turning to emerging technologies such as VoIP for new revenue streams, hoping to offset these declines.

If MCI decides to throw its hat into the ring of VoIP, it would be the third major telephone company to do so. AT&T offers CallVantage, and Verizon offers VoiceWing. SBC has said that it could resell CallVantage service to its customers, although a decision has not been made.

In any case, these services seem to do better than independent VoIP companies. Vonage, the only major independent VoIP provider counts about 600,000 subscribers. On the other hand, existing telecoms are expected to have close to 2 million VoIP subscribers by year's end.