Gossiptel internet calls give BT a new headache

Gossiptel internet calls give BT a new headache

BT faces a fresh challenge to its share of the residential phone market today with the launch of a new company, which makes use of the internet to offer cut-price local, national, international and mobile calls for no monthly line rental.

Gossiptel, based in north-west London, is hoping to capitalise on the growth of broadband internet usage to take a chunk out of BT's business. It uses technology - known as voice over internet protocol or VoIP - which converts voice calls so they can be sent over the internet at a fraction of the price of traditional calls.

Broadband internet users - regardless of who provides their service - can download the Gossiptel software and make cheap phone calls from a new number either through their PC or by plugging an adaptor into their existing phone. Calls to other customers using Gossiptel or similar internet phone services are free.

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Skype, another recent start-up that has received a lot of media attention, offers a similar service. Gossiptel has gone further by offering customers cheap calls to users who are not on internet phones, charged on a pre-pay basis.

Gossiptel customers can call mobile phones from 3.9p per minute at weekends, other fixed line networks such as BT from 1p per minute and 22 countries - including the US and Australia - from 2.5p per minute.

"There are now something like 4m broadband internet users in the UK so we have a real mass market of people who can make high quality voice calls over the internet," said Gossiptel's co-founder, Kim Thesiger. "If you have already got broadband you can get an extra phone line for no cost at all."

BT has launched a VoIP service designed to grab telephony customers away from cable companies NTL and Telewest. In July it will offer a mass market VoIP product called BT Communicator aimed at everyone else. While customers with the software on their computers will be able to talk to each other free, BT Communicator will also allow them to phone other numbers for the same price as customers on its BT Together packages.

Juniper Research expects VoIP technology to account for more than 12% of all telephony revenues by 2009.

Wanadoo has made no secret of its desire to move into the voice calls market to bolster its position in broadband and is expected to make an announcement about the subject within weeks.

Skype is also working on a new version .

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