SBC Communications is rolling out an internet phone service to 50,000 Ford Motor employees in 110 locations, marking one of the largest such deployments yet as traditional phone companies enter the internet-calling fray.

The $US100 million ($143 million) contract shows that large businesses are increasingly interested in upgrading their telephone systems to internet calling technology, even though the market for businesses is still nascent.

Separately, Verizon is expected to begin rolling out a consumer software product named Iobi that will allow consumers to route phone calls, store caller ID phone numbers on contact lists and forward voice mails via email by way of their PC.

The move by SBC, the second-largest local phone company after Verizon in the US, shows how it is aggressively pursuing large business customers and protecting existing enterprise accounts — and that it is using internet calling as a weapon to compete against rival long-distance companies that still dominate the business-telecom market.

SBC and its peers Verizon and BellSouth — three of the big telcos known in the US as the «Bells» — are trying to expand their presence in the business market because they are facing a decline of their local phone business as consumers flee to cable rivals, wireless phones and internet start-ups.

«The Bells are still in the early stages of growing in the business-telecom market,» says Todd Rosenbluth, a telecom analyst with Standard & Poor’s in New York.

«But the business segment is becoming increasingly more important as the consumer side is facing competitive pressures.»

In addition to trying to expand their business segment, large local phone companies are also trying to build up their presence in the high-speed internet, wireless, and consumer long-distance markets.

SBC and Verizon have been very successful at taking long-distance consumers from AT&T and MCI.

Internet calling and recently constructed data networks increasingly allow local phone companies to offer services well beyond their region. And the companies can pitch internet services as a cheaper alternative.

For the Ford project, SBC will design, build and manage the internet phone system for the car maker’s headquarters. The project is likely to be completed in the next three years.

Internet calling is expected to deliver savings on communication costs for Ford, in part because the technology will allow Ford to run data, voice and video over a single network. More-traditional communications technologies require data and voice to run over separate networks.

SBC will use Cisco Systems equipment to build the network, including 50,000 Cisco phones. SBC engineers will also run the network’s day-to-day operations.

In addition, SBC will deliver long-distance data and voice services to Ford’s headquarters. SBC executives say that the company has dozens of similar internet calling and long-distance projects in the works, though not all as sizeable as the one with Ford.

A Ford spokeswoman confirmed that a contract with SBC had been signed but declined to comment on details.