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Verizon to route all calls over Web within 7 years

January 10, 2009|Bloomberg News

Verizon Communications Inc., the second-biggest U.S. telephone company, plans to do away with traditional phone lines within seven years as it moves to carry all calls over the Internet.

The company will start offering Internet calling to its FiOS Web and TV customers in the coming months, starting in Maryland, Chief Marketing Officer John Stratton said Thursday at the Consumer Electronics Show in Las Vegas.

By offering so-called voice over Internet Protocol, or VoIP, calls, Verizon is mimicking providers such as Vonage Holdings Corp. and cable companies, which have won customers with digital plans.

An Internet-based service can be maintained at a fraction of the cost of a phone network and helps Verizon offer a greater range of services, Stratton said.

"We've built our business over the years with circuit-switched voice being our bread and butter . . . but increasingly, we are in the business of selling, basically, data connectivity," Stratton said.

Verizon and rivals such as AT&T Inc. are losing home-phone lines as customers rely on mobile handsets or switch to cable companies that package digital call plans with Web and TV service. In the third quarter, Verizon lost 3.7 million lines from a year earlier.

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