Primus Telecom to provide VoIP services to Microsoft customers

Primus Telecommunications today announced a deal with Microsoft through which it would provide its PrimusTalk voice over IP service to residential and business consumers who use Microsoft operating platforms and the company’s messenger service.

Primus launched the program in Australia about 10 days ago, and expects to complete the rollout to the U.S., Canada and Europe in the next two weeks. The service is available for the Windows ’98, 2000, Millennium Edition and XP platforms. The XP platform has Microsoft’s messenger client already embedded in the package. Users of the other platforms would need to download free software from Microsoft’s MSN Web site.

Users logging onto MSN Messenger would click on a “make a phone call” link, then punch the number they wish to call into a phone dialer. Calls can be made to any wireline or wireless number worldwide, according to Primus.

John Melick, co-president of Primus, said the deal is significant because it represents the first opportunity for Primus to bring VoIP type services to the consumer desktop.

It’s also significant because Microsoft has very stringent acceptance standards and certification processes. “Not every company can register and be part of the Microsoft network,” he said. “We feel that recognition by Microsoft carries with it an endorsement of Primus as one of the premier VoIP providers worldwide.”

It also gives Primus access to the Microsoft user customer base, which translates to millions of potential users.

“Just about every single computer in the world sold today has Windows on it,” Melick said.

Though Microsoft has struck similar deals with other service providers, Melick said the company generally caps the number of providers in any given national market at three. “For example, in Australia, of the big players, Telstra and Primus are the two with national brand recognition that have been selected,” he said. “In Canada, it’s Telus and Primus. In the U.K., it’s British Telecom.”

Primus is the only company participating in the program that has a physical presence in the Americas, Western Europe and Asia-Pacific, Melick said. It’s a point that wasn’t lost on Microsoft.

“Microsoft looks at the Internet as a global data solution,” he said. “The fact that our company is globally oriented and participates in the three major regions lends a lot of credibility to our efforts to gain acceptance by Microsoft.”

Melick said that Microsoft considered smaller regional players when it launched the program about a year and a half ago, but now clearly prefers larger, better-established providers.

“The upheaval in the overall telecom industry has driven them in that direction. They don’t want to select somebody they don’t think is going to be around tomorrow,” he said.

PrimusTalk calls will be priced about the same as Primus' traditional rates for calls that move over the PSTN. “The value proposition for customers in the U.S. or Australia who sign up for the service is that they can travel anywhere in the world, and as long as they can get to a computer with Internet access, they can make calls at U.S. or Australia rates,” Melick said.

Melick recognizes that there is a great deal of competition for the consumer voice dollar given the ubiquitousness of wireline phones and the explosion of wireless, but believes that there is a “strong convergence underway right now” of data and voice services over the Internet.”

“In a very short period of time it is our belief that these services will be one and the same,” Melick said. “Your PC will be your vehicle for telephony calls, for video conferencing, e-mail and data services. It’s only a matter of time.”