BERLIN -- The launch of a Web-based telephony service in Germany could bring relief to customers paying some of the world's highest telephone charges.
But some advocates of the technology wonder if Germans -- long accustomed to using the formerly state-owned Deutsche Telekom to make their calls -- will take the leap from analog to digital.
Net2Phone, a New Jersey-based Internet telephony company, introduced its German service this month and expects the features to be fully implemented by the end of April. Besides placing calls, users will be able to receive and send email, voicemail, faxes, and instant messages at the site.
It's the cut-rate phone calls that are the company's strongest sales pitch.
"The inexpensive calls will unseat the Germans," Net2Phone COO David Greenblatt said. "Generally speaking, it will be about half of the traditional rate of a phone call."
Presently, a customer dialing a local number within Berlin will pay DM1.20, or US$0.62, for a 10-minute call. A call to the United States with Deutsche Telekom costs DM4.80 ($2.46) for 10 minutes. And that doesn't include fees and taxes.
Voice-over Internet Protocol (IP) would seem a likely remedy for these hefty charges. Like other data transmitted over the Internet, voice-over IP breaks a call into packets of information, then reassembles them at the call's destination. Because it doesn't require building the dedicated circuit used for traditional phone communication, the technology translates into cheaper call rates.
With Net telephony, "it could eventually cost less to call the United States from Berlin than it does to call across town [on a regular phone line]," said Dirk Nolde, who covers the Internet for the German newspaper Die Welt.
To cash in on the savings, however, Germans first need to go online.
Fewer than 10 million Germans -- 12 percent of the population -- use the Internet, according to media research firm Gfk.
Critics partly blame the low numbers on Deutsche Telekom's high per-minute tolls. The government began privatizing Deutsche Telekom in 1998 but remains its primary shareholder.
Nolde said Germany's largest telecommunications operator still enjoys preferred status.
"It's a long process toward privatization, and it will be a while before we can say, 'This is a privately owned firm,'" Nolde said. "[Deutsche Telekom] has all of the infrastructure, so they can charge anyone what they want to charge for the usage of their lines, including the Internet service providers.
"Privately owned phone companies -- and AOL even -- say that Deutsche Telekom is a de facto monopoly."
In a nation where the government's presence is felt in most industries, Nolde thinks upstarts like Net2Phone will escape the wrath of regulators.
"No one has recognized that there is an opportunity to tax [Web-based phone calls]," he said. "Sometimes you get the impression that the government is not up-to-date about the Internet."
Net2Phone's Greenblatt isn't worried about bureaucratic controls, either. He thinks the German government will appreciate IP telephony's benefits for commerce and communication and take a hands-off approach.
"We have not had trouble with [regulatory bodies]," he said. "In the past, phone companies were country-specific and run by the government. But we are a worldwide telephone company, and there is a tolerance for us.
"[IP] telephony is a freight train, and governments have to realize that they won't be able to stop it."
Net2Phone, which went public last July, is not IP telephony's first foray in Germany. A homegrown variety -- BuddyPhone -- launched at the end of 1998, and the U.S.-based deltathree.com also run local networks here.
Net telephony is still experiencing its "birthing pains," Greenblatt acknowledged. Americans spent 2.5 billion minutes making Web-based phone calls last year, an increase of 200 million from 1998. But it's still an infinitesimal figure when compared to the 7 trillion minutes they spent talking on traditional phone networks.
Greenblatt wouldn't predict how many Germans will sign up for his company's service, but said, "We are building for the large scale. We're building under the premise that Germany will be open wide."
That upbeat projection doesn't speak to the wariness some Germans hold for the technology.
Gerrit Köster, a 26-year-old student in Berlin, calls his girlfriend in New York almost every day. He decided to try a voice-over IP service when he heard it would shrink his phone bill, but found the experience unwieldy.
"You have to turn on your computer, put on your headset, and then you have to sit in front of your computer," he said. "It's not natural -- you can't interrupt the other person, because only one person can talk at a time.
"I decided that my phone bill wasn't too expensive after all."
Infrastructure limitations and narrow bandwidth can corrupt the voice quality of Web calls. A voice can sound almost perfect -- or nearly unintelligible.
But Nolde doesn't think it's unreliable sound holding back most Germans. They are "comfortable" with Deutsche Telekom, in spite of its high prices. Before the masses use their modems to call mom, they will need to get over their "fear of technology, that it's too complicated," he said.
"If [Net users] realize that they are able to telephone via the Internet for the fraction of the cost, they will do it," Nolde said.
But he doubts anyone will buy a computer just to make phone calls.
"Germans don't know what to do with the Internet," he said. "To do normal things -- such as writing email, looking up things they can find in the lexicon -- is not enough for them to pay DM1,700 ($870) for a computer.
"If you don't know what the Net can do for you, how you can use it, you'll say, 'Let's take a vacation to Majorca instead.'"
