US long-distance fixed-line operator AT&T Corp has added to the optimism surrounding VoIP with the announcement that it will begin the roll-out of its consumer broadband internet telephony service in March.

The company expects to have 1 million business and consumer VoIP customers by the end of 2004. At the moment, Vonage is the leading broadband VoIP service provider in the US, with 100,000 customers. It charges $35 a month for unlimited local and long-distance calls.

The announcement was however was tempered by the news that AT&T is planning to cut 8% of its workforce, or about 4,600 jobs, this year.

The phone company told analysts it wants to transform itself into a networking company, moving data into homes and businesses over high-speed internet connections, but said first it must face declining margins in its long-distance business, which still accounts for more than half of its revenues.

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