AT&T Global Services and Net2Phone, supplier of IP telephony services, today signed a five-year, $100 million contract that is designed to help Net2Phone lower its costs and extend the reach of its services.
Under the contract, AT&T Global Services, formerly the IBM Global Network, will house Net2Phone's gateways in network entry points in 17 unspecified countries, with a dozen more under consideration.
Users with a multimedia PC download Net2Phone's free client software and pay in $25 increments for its Internet telephony service, which costs five cents a minute for domestic calls and nine to at least 20 cents for international calls, a company spokesman said.
But by using AT&T's IP network as opposed to a mix of IP and more expensive circuit-switched links, providing the calls will cost Net2Phone less. The company says it plans to pass savings to customers but would not estimate how much rates may drop.
Net2Phone already has an international network comprising IP lines from its parent company, IDT Corp., and IP links leased from 50 other providers. But the non-exclusive AT&T agreement will expand its reach with service due up in a few weeks.
The AT&T deal comes on the heels of a contract with Sprint Corp., which plans to resell Net2Phone's PC-to-phone Internet calling service.