updated 6/10/2004 7:22:52 PM ET 2004-06-10T23:22:52

The price war for Internet phone service is on.

That's great news for people who make calls over the Net, and rotten news for telecommunications companies.

Primus Telecommunications, Inc. has joined the battle that, until now, largely pitted AT&T Corp. against Vonage Holdings Corp.

Primus is offering unlimited local and long-distance calling, using Voice over Internet Protocol technology, within the United States, Canada and Western Europe. It's free for three months, then $19.95 a month.

To subscribe, customers need a DSL connection to the Internet and a standard telephone. Primus supplies the digital-to-analog adapter.

The announcement from Primus follows AT&T's March entry into the business, a move that spurred price cuts by tiny competitor Vonage.

Vonage offers unlimited domestic and Canadian calls for $29.99 a month. AT&T's introductory rate for unlimited domestic voice-over-Internet calls is $19.99 a month for the first six months, $39.99 after that.

Watch for more cuts.

"Theoretically, voice-over-Internet should be near free, but it's going to take many years to get there," said Scott Cleland, chief executive of the Precursor Group, a consulting firm. "Voice is a very simple, easy application on a data network."

Copyright 2004 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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