Qwest quietly began offering Internet phone service last week to consumers in Denver and other cities in its 14-state area.
The move allows Qwest to better compete with Internet phone upstarts like Vonage and Skype, and companies like Comcast that provide phone service over cable lines.
Internet phone service – also known as Voice over Internet Protocol, or VoIP – is cheaper in part because it is mostly free from taxes and federal charges applied to traditional phone service.
Yet Qwest must sell a cheaper phone service to existing customers. It also must spend money to build out its Internet phone infrastructure, experts say.
“It’s going to cannibalize revenue and raise cost for Qwest,” said Eric Buck, an analyst with Janco Partners in Denver. “I don’t think you will see them overly aggressive in marketing.”
Qwest issued no press releases nor public statements as it launched the new consumer service, known as OneFlex Premier, which was originally scheduled for earlier this year.
Vonage charges $25 per month, with unlimited long-distance calling. Qwest will charge $30 per month for its Internet phone service, plus 5 cents per minute for long-distance calls with a $2.99 monthly fee. Both offerings include a full range of features, such as caller ID and voice mail.
Qwest’s VoIP offering is less expensive than its Choice Home Plus package, which includes unlimited local calling and a full range of features. It costs $35 per month, with about $10 in taxes and fees, with one long-distance option at 5 cents per minute plus a $4.99 monthly fee.
Staff writer Ross Wehner can be reached at 303-820-1503 or rwehner@denverpost.com.
