Skype Technologies, whose software has allowed millions of people to make free calls on the internet, is about to go mainstream.

The internet calling rebel plans to start offering calls from computers to regular phone lines anywhere in the world for less than US2˘ a minute. The company last week announced a deal with Level 3 Communications and other carriers to route the calls.

In less than a year, Skype — a creation of the makers of music file-sharing software Kazaa — has attracted more than 7 million registered users by offering free software that allows them to make free calls from one computer to another.

The move by Estonia-based Skype comes soon after Verizon Communications, the largest phone company in the US, launched its own nationwide internet calling service. AT&T and Qwest Communications already offer internet calling, as do many of the largest cable companies in the US and a slew of upstarts.

Calls made via the internet cost significantly less than calls over telephones because the technology sends calls in data packets over the internet or a phone company’s own network instead of tying up a phone line. High-speed internet connections are required.

While a number of the first internet calling companies, such as Skype, only routed calls from one computer to another, companies have since designed special equipment that allows customers to route calls via phones. Technology research firm Yankee Group predicts that some 17 million people will use internet calling services by 2008, reshaping the world’s telecommunications industry by significantly lowering the costs.

Verizon’s new service starts at $US29.95 ($42) a month for unlimited local and long-distance calls for the first six months for existing broadband customers. Internet start-up Vonage Holdings offers phone subscriptions for as little as $US14.95 a month and as much as $US29.95 a month.

Cable companies are also using internet calling technology to add phone service to their product portfolios, posing an ever greater threat to regular phone companies such as Verizon, SBC Communications, BellSouth Corp and Qwest, which collectively have lost millions of subscribers in recent years.

Skype’s business model is different from its rivals. The company doesn’t charge a monthly service fee but instead charges for calls by the minute. However, calls from one Skype user to another cost nothing.

To defend themselves against the looming threat of internet start-ups and cable companies, phone companies are steadily expanding their range of services to everything from satellite TV to long-distance.

They also keep dropping their prices.

Skype’s free internet calls work much like instant message and voice services on the internet. Callers download the company’s free software from its website and register a username. They can then talk to other registered users — and now to users of regular phones — through headphones plugged into their PCs.