Internet phone service Vonage on Tuesday said it has struck a deal with Cisco Systems Inc. to sell Vonage-ready equipment at hundreds of retail stores in a bid to boost new subscriptions.
Vonage also said it was working with Netgear Inc. to develop a line of Internet phone equipment, including a device that combines its phone service with wireless networking.
The moves came a day after AT&T Corp said it would sell its CallVantage Internet phone service in Best Buy stores, part of its push into the nascent Internet phone market after announcing a retreat from traditional local phone service.
Both services use voice over Internet protocol, or VOIP, to send telephone calls through high-speed Internet connections at rates well below those for traditional phone service. AT&T and Vonage are both fighting for position in a growing pack of competitors, including Verizon Communications Inc.
Under the Vonage deal, Cisco’s Linksys home networking unit will offer a $59 adapter for Vonage service and a $89 home router that has the adapter built-in. Linksys and Vonage will sell the devices through Staples Inc. office supply stores among others, and Vonage will offer them on its web site.
Vonage Chairman Jeffrey Citron said the company would also sell Netgear routers later this year that offered WiFi wireless networking.
With U.S. broadband households at 30 million and growing rapidly, analysts expect VOIP services to eventually take a significant share of the market for home phone services — up to 17 percent by 2008, according to estimates from industry research firm Gartner.
Vonage said it has about 240,000 lines in service and is adding about 1,000 users a day. AT&T has not released figures for CallVantage.
But independent providers such as Vonage faces a number of hurdles. Most telephone companies that sell high-speed Internet access require customers to buy phone service as well. Cable companies have aggressive plans to launch their own VOIP services. And federal regulators are still debating how rules for traditional phone service should apply to VOIP.