While the other Bells talk about their plans around voice over IP, one is actually offering a service.

Qwest appears to be the first regional Bell operating company to offer a residential VoIP service - to DSL customers in Minneapolis-St. Paul. Qwest announced intentions to do so last month and turned up the service this week.

VoIP in the Twin Cities is the first of a phased deployment for Qwest. The RBOC plans to provide VoIP services to additional residential and small business customers as well as to midsize and enterprise business customers during the first half of 2004.

In addition to "plain old telephone service" (POTS), VoIP customers will be able to: 

* Go to a Web site and view a call log of missed, incoming or outgoing calls as well as “click-to-dial.”
* Add personal contacts and place them in groups for later “smart” call forwarding.
* Specify call forwarding locations for different groups of callers.
* Schedule calls to automatically forward to an alternate number during designated times and days of the week.
* View and listen to voice mail messages online.
 
While it waits for its RBOC brethren to turn up service next year, Qwest will face immediate VoIP competition in the Twin Cities from cable multisystem operators (MSO) and alternative carriers like Vonage. Of the cable MSOs, Comcast and Cox overlap most with Qwest and 40% of its residential customers are also customers of the four most telephony aggressive MSOs, analysts say. Qwest is also the most exposed of the RBOCs, with DSL sold into only 6% of its primary residential lines, they say.

Interexchange carriers will also join the fray - AT&T this week announced plans to expand its residential and business VoIP offerings.

Qwest did not announce pricing for its new service, which will be rolled out to about 200 homes in the Twin Cities. Analysts believe, however, that it will be priced very attractively to stave off competitors and retain customers.

"We anticipate monthly rates for this service will be significantly lower than the company's traditional circuit switched offering," says John Hodulik of UBS Warburg.