AT&T embraces VoIP.

AT&T is switching to the Internet and launching a full range of consumer and business Voice over Internet Protocol (VoIP) services. VoIP, which turns voice into data packets for transfer over the Internet, lets businesses avoid the long-distance charges of traditional telephone switch-circuit networks. Businesses that stand to benefit most from VoIP are those with remote employees or multiple offices.

Most traditional phone companies see VoIP as a serious threat and have been arguing to the FCC that the new breed of VoIP-only carriers should be subject to the same rules and regulations traditional phone companies deal with. However, AT&T is moving full steam ahead with its VoIP offerings. "You have to look at where the market is going," says Joe Aibinder, product marketing director for AT&T's VoIP services. "VoIP is here to stay, and the ability to put voice and data on the same network gives us a great opportunities for supplying our customers with services they value. It also lets us consider retiring older, voice-only networks which could generate savings for us in the long run."

AT&T has been using VoIP since 1997 as a way to handle international voice traffic, and it started selling VoIP services to business clients in 2001. "When companies come to us, it's because they're looking at replacing their PBX gear with IP telephone gear from companies such as Cisco and Avaya," says Aibinder. "We can work with both kinds of equipment, so we can work with them through that transition."

AT&T will roll out expanded VoIP in major cities across the U.S. in 2004, beginning with select west coast markets in the first quarter of the year.

More than 5 million people will subscribe to VoIP services by 2007, according to Arizona research firm In-Stat/MDR.