Dutch Cable Firms to Pool Phone Networks

The top five Dutch cable companies plan to connect their Internet
telephony networks, opening the door for free phone calls between
their 450,000 phone subscribers, they said on Wednesday.

The companies plan to set up an exchange, eliminating the need to
route such calls via the traditional phone network, said Sikko de
Graaf, Chief Executive of CaiW Diensten, the services arm of one of
the five cable firms.

While it would be up to the individual companies, which together cover
virtually all Dutch households, how to price their voice-over-Internet
protocol (VoIP) service, "it will open the door for free...telephony
and video," De Graaf said.

"You will see the cost of telephony in the Netherlands come down very
rapidly," he said.

The move by the cable companies -- UPC Netherlands, Casema,
Multikabel, Essent and CaiW -- is a further sign that Dutch telecoms
group KPN faces stiff competition in its home market.

The five firms cover 95 percent of the Netherlands, have 7 million
cable television customers and are adding 50,000 telephone subscribers
a month. This would push the number of households using Internet
telephony above 1 million by next year, De Graaf said.

The Internet telephony service offered by cable operators and
increasingly by telecoms operators is different from completely free
VoIP services such as Skype, which requires a computer connected to
the Internet.

Internet telephony offered by cable companies works with regular
phones and is usually charged by the minute, although it is cheaper
than traditional telephony services.

The cable companies selected Britain's XConnect and New-Jersey-based
Kayote Networks to set up the exchange in Amsterdam.

Copyright 2006 Reuters Limited.

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