No sooner had AT&T announced a $5.00 a month cut in its VoIP service effective Friday, than Vonage Holdings dropped its VoIP monthly charge by $5.00, thereby remaining $5.00 below AT&T’s charge.

With the new prices, AT&T’s monthly charge is $29.99, while Vonage’s price is $24.99. Both services are similar, offering local and long-distance service in the U.S. and Canada, in addition to a host of advanced features, such as call forwarding, which can be managed over users’ PCs.

«Over the past five months, we’ve noticed a trend in the industry away from calling certain minutes local and others long distance,» said Vonage chairman and CEO Jeffrey Citron, in a statement. «In an IP world, distance is irrelevant, so we have changed our calling plans to reflect that.»

Vonage now charges $14.99 a month for 500 minutes of local and long-distance calls throughout the U.S. and Canada, while its $24.99 monthly plan is for unlimited calling in the same region. The latter plan is similar to AT&T’s CallVantage plan, which is being marketed in 170 regions in the U.S.

Vonage has been the most visible U.S. supplier of VoIP services and says it has signed up 275,000 subscribers for the service. AT&T has not released any subscriber figures for its VoIP service.