Voice-over-IP (VoIP) provider Vonage has launched in the UK, with full approval from Ofcom to offer stiff competition to BT.

"We will offer call quality as good or better than BT," said chief executive Jeffrey Citron, at the London launch. The £9.99-a-month flat rate service allows customers to use any existing phone, which they plug into a Vonage-enabled broadband router. Calls are then free, except international calls and calls to mobiles. The Linksys-made routers will be available from Staples for about £25.

Vonage staff said that Ofcom had welcomed its arrival in the UK, and had gone to some lengths to allow it to make its service (which has been in tests in the UK since January) competitive. For instance, customers will be allowed to keep their Vonage number when they move house, severing the geographical link between dialling code and area. If a customer gets a "London" number, they call and receive calls on that London number, whether their router is connected to the Net in London or Cardiff.

"The UK is our beach-head in Europe," said Vonage corporate communications director Jamie Serino, adding that the next target country depends on broadband penetration, and the national regulators' willingness to give VoIP customers "real" phone numbers. In France and Germany, the telecoms bodies are less willing to be flexible, perhaps to protect the incumbents.

Vonage's plans for a Wi-Fi handset are moving along, with a US launch planned in Summer, and a UK launch in the third quarter of this year, said Kerry Ritz, managing director of Vonage UK.

Although launched as a cheaper alternative, Citron stressed the features of the offering, including quality - something of a bug-bear with the PC-based Skype service. "Skype is not a competitor, it is a calling card company," said Citron.

For users not sure whether to change, he mentioned the extra features that Vonage offers: "Some people come to us for the voicemail," he said. "You can route voicemail to your email box, and take a Gmail approach to voicemail. I've got all my voicemails for the last two years on my hard disk."