AOL Launches VoIP, finally

After months of build-up, denials and non-denials, America Online (US) has launched a VoIP service, finally catching up with itself. AOL France and AOL Canada have been selling VoIP service for the longest time. AOl launched its Internet phone service in more than 40 cities. The introductory packages are between $13.99 and $29.99, but will go up by about $5 after three months which will make the package more expensive than most other VoIP service providers. Why?

AOL imagines that is a “brand” and a “channel” that can be milked. Tell that to AT&T which spent millions of dollars and had mere 53,000 customers to show for it. Still, if AOL can get any dollars to prop-up the losses of dial-up customers, it can’t be bad for the shareholders. They have a long dirty fight ahead of them. Just remember today is the day, Verizon decided to push its discount VoIP package for $19.99 a month. That $5 -premium after 3 months is not going to work for AOL, and they will have to compete on prevailing rates. You think Vonage is going to sit idle! Let the madness begin! (Disclosure: Business 2.0 is part of Time Warner’s Time Inc division. Time Warner also owns AOL.)

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