US broadband voice over IP (VoIP) provider Vonage has rolled out its UK service, offering two price plans: Residential Unlimited for £8.50 + VAT a month and Small Business Unlimited for £16.16 + VAT a month.

Vonage UK managing director Kerry Ritz said the service had two main attractions: "Customers can choose their own phone number and take that number with them, so effectively it's a number for life; and secondly, you can start to use virtual numbers. For instance, you could have a second number corresponding to a US number, which US users could call and it would be billed as a local call for them."

Ritz said Vonage's prime target is BT customers, but added that the company has no immediate plans to offer an enterprise service.

Assessing the impact of Vonage's arrival in the UK, Sandra O'Boyle of Current Analysis said, "Vonage's launch of VoIP in the UK will spice things up, and could well force BT to make the price of VoIP bundled with DSL broadband access more attractive, but for now old-fashioned telephony rivals NTL, Telewest, Tele2 and OneTel are a far bigger headache for BT."

Mark Main of analyst Ovum said, "I still think that VoIP offerings have a way to go yet. Phoning your work colleagues is one thing, but depending on the service to talk to business clients is another."

Current Analysis' O'Boyle said BT is investing in VoIP but is reluctant to push the technology for obvious commercial reasons. "BT is planning an all-IP network and is experimenting with BT Yahoo Communicator and Broadband Voice. But it is in no rush to promote these VoIP services or make them really competitive at the expense of [its standard telephone] revenues, but that could change if VoIP start-ups grab serious market share," she said.

The Vonage service uses a Linksys RT31P2 broadband router that can connect to a standard phone, although the company does supply a PC/laptop softphone client. IT Week tested the service and found that although voice quality was generally good, calls did suffer from latency, particularly over low-bandwidth ADSL. Setting up the hardware was easy, however. Once the router has an IP address and the automated installation process is complete, users can start using the phone immediately.