AT&T today announced a big voice over IP initiative that will put the service in the top 100 U.S. markets by the middle of the first quarter 2004.

The company, which has been providing select large enterprises with VoIP service and using IP to transport calls, said it is simply following the customer demand, increasing its current portfolio to include all business sizes and residential customers. On the business side AT&T will make a big push to bring smaller and medium businesses to the new platform as well as connect large business and enterprise remote offices and teleworkers to existing VoIP networks.

On the consumer side AT&T plans to target high-end voice users, providing an access agnostic platform which allows customers to receive local and long-distance bundles over AT&T’s expanding DSL service or over a cable modem or DSL connection of another provider. The move gives AT&T a much broader potential customer base at the launch of the service in the first quarter--essentially anywhere broadband is available. AT&T is rapidly growing its own DSL footprint though. Today the carrier also announced it is launching residential voice service in three new states as well as Southern California and bringing DSL to three Midwestern states, expanding its DSL footprint to a total of 11 states.

Speaking at the Credit Suisse First Boston’s telecom and media conference in New York, CEO David Dorman said AT&T’s reputation and experience, combined with its early entry into the nascent VoIP market, gives it considerable advantages.

"We intend to be the market leader with respect to voice over IP," Dorman said. "The brand brings us a huge advantage to create trust in the service, and we are best equipped to handle the technology’s complexity."

AT&T is adding VoIP capabilities in some West Coast metropolitan areas and will migrate that project to other cities soon. By the end of the first quarter of 2004, AT&T will have the infrastructure in place to offer services to the top 100 markets in the U.S., though the carrier did not reveal further details of its rollout timeline.

Dorman also announced the creation of a new executive position to spearhead AT&T’s VoIP efforts across the consumer and business division as well as development operations in AT&T Labs. Cathy Martine, currently a senior vice president in the Consumer division, assumed the new role and is overseeing the transition from trial to full deployment.

While AT&T will market the new packet services heavily, Dorman assured the CFSB analysts that it would still maintain the same quality of service over AT&T’s circuit switched network. "This won’t happen over night," Dorman said, referring to the transition between a circuit-switched network to a fully packet-based network. "There is a need for the legacy networks to operate at the same level of reliability and robustness for some time to come."

Though the company did not provide immediate details of its architecture or vendor selection, AT&T has been using Sonus softswitches. In Sonus’ third quarter, the carrier made up at least 10% of its revenue.