BT Taking On Skype In UK With Revamped VoIP Service

BT has said that it intends to tackle VoIP powerhouse Skype head on with a revamped lineup of VoIP products and services. BT, the UK’s largest telecoms provider, has lagged behind Skype in recent years.

Skype have undercut BT tariffs to overseas destinations and customers have been flocking to Skype in their thousands to take advantage of the savings on offer. As part of their challenge, BT will undercut Skype’s call charges to 50 of the most popular overseas calling destinations.

BT’s predicament has been that they largely rely on revenue from their traditional telephone network, which charges users on a per minute basis. In contrast to this, Skype’s model has always been free calls between two users with their software installed and cheap rates internationally. Todays announcement that BT will take on Skype is seen as an aknowledgement of the necessity for them to adopt VoIP technology and push it out into the mainstream.

BT will use cheap VoIP calls as an incentive to attract new customers to it’s broadband offerings, while accepting that they will inevitably lose revenue from their traditional telephone network.

Speaking at an event to launch new broadband products, BT’s chief executive of retail, stated that “BT will be selling broadband by offering VoIP.” Mr. Livingstone went on to add that new BT Broadband customers are already being offered VoIP services on signup.

Currently BT derives £5bn from consumer services, most of which is made up of line rental and call charges. At today’s event Mr. Livingstone made it known that BT wish to generate one third of their overal revenue from broadband related services by 2010.

BT’s is making plans to launch it’s broadband TV distribution service next year, based on Microsoft technology. The new service will offer TV shows and video content on demand but will face stiff competition from current market leaders Apple Computer, who just announced a deal with NBC.