Cox Dialing Into Internet Telephony Field; Its Phone Service Is Gaining; Cable firm might become bigger threat to the Bells by pushing Voice over IP.(INTERNET & TECHNOLOGY)

Byline: REINHARDT KRAUSE

Cox Communications Inc.'s drive to sell phone services is moving into stage two: Internet calling.

Cox leads other U.S. cable firms in making phone services available to its customers. More than 40% of Cox's 6.3 million video customers can place phone calls via their cable service. That's a much higher percentage than at its peers, which include Comcast Corp., Time Warner Cable and Charter Communications Inc.

Now Atlanta-based Cox aims to go a step further and offer Internet phone calls via a technology called Voice over Internet Protocol, or VoIP. The move would make Cox a bigger threat to local phone companies, analysts say, since VoIP calls are often cheaper than regular ones.

"It's about increasing their footprint and working toward the future," said Bruce Leichtman, head of Leichtman Research Group.

Cox is well-poised to sell VoIP services. As of March 31, it was already selling regular phone services via cable to more than 782,000 residential customers. That's almost a third of U.S. homes that get phone services from their cable company.

Providing phone service is part of Cox's bundling strategy. It offers discounts to customers that buy phone services along with video or Internet access.