Internet service providers in Central Oregon are focusing their efforts on the next key battleground for telephone market share: local businesses of all shapes and sizes.

BendBroadband officials said Tuesday that the company has launched commercial Voice over Internet Protocol services in Central Oregon. Since last week, the service has been available to businesses in Bend, Redmond, Sisters, Black Butte and Terrebonne.

Voice over Internet Protocol, or VoIP, transmits voice signals normally traveling on phone lines over broadband Internet connections. The technology is gaining popularity in the phone market because it’s cheaper than service using conventional phone lines.

”We had a list of hundreds of customers just waiting for this, and we have just been calling people on that list,” said Scott Petre, vice president of business services with BendBroadband. ”It’s a multimillion-dollar opportunity.”

Several other providers, ranging from Denver-based telecommunications giant Qwest Communications International Inc. to local firms like Central Oregon Internet, are either planning or have already implemented similar services.

The reason for the rush to the market?

VoIP has more application in the commercial sector than residential sectors, and the former is still relatively underserved, telecom officials said.

Although no statistics from the commercial VoIP sector are available, residential VoIP users in the country tripled in 2005, reaching 4.2 million. Annual growth of almost 44 percent is expected through 2009, according to the latest report from the Telecommunications Industry Association.

VoIP providers say they see similar promise for VoIP in the commercial market.

Ryan Bello, head of development at Central Oregon Internet, said VoIP can be used to track how effective certain types of advertising are for particular businesses.

Case in point: Central Oregon Internet itself, he said.

”We put different phone numbers with our different methods of advertising,” said Bello, whose company has been using VoIP for two years. ”When a call comes in, we can instantly track which number they called, and therefore know what ads are working and which ones aren’t.”

Central Oregon Internet, also known as COINET, plans on launching commercial VoIP in the next few months, according to Bello.

Other local companies, like UNICOM, also offer commercial VoIP services to the region’s businesses.

For Qwest, the region’s major land-line phone service provider, VoIP is an opportunity to keep up with technology, not to mention market share, one official said.

”We are expecting the (commercial VoIP) business to dramatically increase,” said Qwest spokesman Bob Gravely, noting that a survey conducted last year among Oregon business found all 152 respondents looking to implement the service within a year.

The same survey found Oregon business officials anticipate a 40 percent savings for phone costs by switching to VoIP. As such, Qwest is not viewing VoIP as the adversary of conventional phone service, but as an extension of its own business.

”I think it’s clear that some people prefer one, and some people prefer the other,” Gravely said. ”We want to offer both, so we don’t see (VoIP) eating into our business, because it is also our business.”

For BendBroadband, the added service is also an extension. In their case, however, it is from their Internet and cable television business.

Petre, who joined the company four months ago to head the commercial VoIP program, said the company already has a large number of companies using BendBroadband’s Internet services, and adding phone lines on top of that is only natural.

”We see (commercial VoIP) as a big part of our company,” he said. ”When you look at our revenue streams, the business sector is one of the main engines. So we see it as a big opportunity because it’s so underserved.”

Officials aren’t worried about the market becoming crowded, they said.

”Competition is part of the business, whether it’s VoIP or something else,” Qwest’s Gravely said. ”It’s something we face all the time.”

What is VoIP?

Voice over Internet Protocol transmits voice signals over broadband Internet connections.