Yahoo! will soon be providing telephone services via the Internet through the popular instant messaging client they have developed. Yahoo Messenger with Voice will not only allow users to make calls to land lines and cell phones but to receive calls as well! The "Phone Out" service will be really cheap to use with a cost of merely $0,01 per minute for the US. Calls to other countries will be $0,019 per minute. Both rates are quite lower from Skype's $0,023 per minute!

Furthermore, Yahoo! will be offering the option to receive phone calls (PhoneIn) for a monthly or yearly subscription of $2.99 or $29.90 respectively. PhoneIn subscribers will be able to select a local phone number to make sure that those calling them will not be charged with long-distance or international call rates. Finally, those who travel frequently will sure benefit from being able to be reached at multiple phone numbers including France, Great Britain and the US.

With this move, Yahoo! directly challenges Skype, which was recently bought by eBay for $2,6 billion. Skype currently has 68 million users while the SkypeOut service, the only Skype service that brings in revenue is used by 2 million users. Despite this popularity, Skype has not yet been profitable.

Almost at the same time with Yahoo!, British Telecome decided to attack Skype as well. The company will be offering VoIP services at cheaper rates for at least five popular calling destinations internationally. British Telecom also states that it's PC to land line call rates are already cheaper than Skype's through the BT Communicator service.

Of course, Microsoft could not be absent from all this! The company has recently signed an agreement with MCI for the joint promotion of using the Internet for local and long-distance calls. This new service will be available in MSN Messenger but will unfortunately be more expensive than the Skype and Yahoo! alternatives, at 0,023 per minute. These rates, however, are only valid for the test period and it is expected that they will be reduced once the service is fully functional. The underlying technology has been developed by Teleo, a company which Microsoft bought last august.

So it seems that we're finally seeing some real competition in the VoIP field and consumers are very likely to gain from it! However, let's not forget the hidden cost of our broadband connections that still make Internet calling more expensive than using our land lines. For VoIP to reach it's full potential more steps need to be taken towards making broadband connections cheaper and more available not only across the US, but across the world!