Microsoft and MCI Join the VoIP Fray
Microsoft’s MSN and MCI announced on Monday that they have teamed up to form a global computer-to-phone service. Users will be able to make calls for as little as 2.3 cents per minute, which is lower than the best MCI rate.
This move makes Microsoft a latecomer to the already saturated voice over Internet protocol (VoIP) market. They will compete with the likes of eBay’s Skype, Time Warner’s AOL, Google, and Yahoo!. Skype’s SkypeOut service, AOL’s AIM Triton, Google’s Google Talk, and Yahoo!’s Messenger are the strongest services that Microsoft and MCI will have to face.
The name of the new service will be MCI Web Calling for Windows Live Call. It will be available through Windows Live Messenger, formerly known as MSN Messenger, which currently boasts 185 million users worldwide.
MCI and Microsoft are testing the Windows Live Messenger service in a pool of 10,000 users. They expect to enlarge this number to tens of millions of Microsoft instant messaging users within four months. Their goal is to make the service available internationally within one year.
Microsoft unveiled its Windows Live and Office Live Web-based services in November. These services will have a focus on software offerings online, which is part of Microsoft’s recent strategy shift.
At first, subscriptions to the service will only be available in five markets, starting with the U.S. and widening to include Britain, France, Germany, and Spain within the next few weeks, according to Blake Irving, vice president of MSN Communications Services.
During the beta testing period, users of the service will receive one free hour of calls and will pay rates starting at 2.3 cents per minute for calls within the U.S., to Britain, and Western Europe. Calls to Japan will cost 3 cents per minute, while calls to Argentina will cost 3.5 cents per minute. Both of these rates are 20 to 50 percent less than MCI’s usual international calling packages. Prepaid calling time can be purchased from MCI in $5, $10, or $25 increments.
Yahoo!’s service, which was introduced last week, is expected to cost 1 cent per minute for calls from a PC to a fixed-line or mobile phone. This rate is expected to pertain to PCs that are outside of the country as well. Calls made through the Yahoo! service to about 30 other countries will cost about 2 cents per minute.
Final pricing for the MCI-Microsoft service will be finalized in 2006, when it makes the transition out of test mode. Meanwhile, Verizon Communications is waiting on final approval on its deal to acquire MCI.
Irving is confident that Microsoft customers will choose their new service despite the large field of competitors. “Our new Windows Live PC-to-phone voice feature requires a partner that shares our vision for connecting people globally. Our customers are going to love this.”
This move not only adds another option for VoIP users to choose from, but it also highlights the ever-growing challenge that Web-based calling is presenting to traditional voice-based telephone services. With cheaper prices and the convenience of the click-to-call technology creates a viable threat for traditional phone companies.
Sources:
http://today.reuters.com/news/
NewsArticle.aspx?type=internetNews
&storyID=uri:2005-12-13T063604Z_01
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MICROSOFT-MCI.xml&pageNumber=0&
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http://news.ft.com/cms/s/ece0c56a
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http://www.pcworld.com/news/article
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http://www.redherring.com/Article.
aspx?a=14851&hed=Microsoft%2C+MCI+
Talk+VoIP§or=Industries&
subsector=Communications
