Microsoft Corp.’s MSN and MCI Inc. said on Monday they are teaming
up to extend the reach of MSN’s instant-messaging service into the
crowded global computer-to-phone call market.

The deal will allow
consumers to place calls for as little as 2.3 cents a minute —
undercutting rates MCI offers existing customers — and highlighting
the challenge Web-based calling poses to voice-based telephone

For Microsoft, the partnership puts it in competition
with a growing field of major Internet companies offering free or
low-cost Web-based calling services — from international Web-calling
company Skype, a unit of eBay Inc., to Time Warner Inc.’s America
Online and Yahoo Messenger.

"The intent is to be very price
competitive with who is out there," Patty Proferes, senior vice
president of Mass Markets and Corporate Advertising for MCI, said in a
phone interview.

The two companies said the new service, to be
known as MCI Web Calling for Windows Live Call, will be available
through Windows Live Messenger — Microsoft’s recent name change for
its MSN Messenger, which counts 185 million active users worldwide.

Further details can be found at

and Microsoft said they are testing the Windows Live Messenger service
among 10,000 users, which they expect to expand to include tens of
millions of Microsoft instant messaging users within four months. The
service will be made available to subscribers in countries worldwide
within a year.

Subscriptions initially will be available in five
markets – starting with the United States and then extending to
Britain, France, Germany and Spain in the next few weeks, said Blake
Irving, vice president of MSN Communications Services.

Once a
customer subscribes to the new service, customers will be able to place
calls for 2.3 cents a minute to phones in any of the five countries.
Prepaid calling time can be purchased from MCI in $5, $10 or $25

By Eric Auchard

More here.