Vonage Canada has extended its internet cellphone service to Charlottetown and Sydney, N.S., the company said Thursday.

A high-speed internet connection is necessary to use internet phone systems, or Voice over Internet Protocol (VoIP) services.

Vonage has added service to five Maritime cities in two days. On Wednesday, the addition of three New Brunswick cities — Saint John, Moncton and Fredericton — pushed the total number of communities served to more than 70 in eight provinces.

The company's service is not available in Saskatchewan or Newfoundland and Labrador.

Marketing is crucial for Vonage, the company's U.S. parent said in a recent filing with the U.S. Securities and Exchange Commission. It has to keep growing to keep the cash flowing, and has spent more than $30 million US a month on marketing in the U.S., Canada and Britain in the second quarter.

Vonage had a total of 1.8 million subscribers on June 30, up from 847,000 a year earlier. Canadian figures were not broken out.

Based in Mississauga, Ont., Vonage Canada's service is available by linking a regular touch-tone telephone through a special adapter or through a computer or USB flash memory drive connected to a high-speed internet connection.

Users of the service can place and receive calls to and from their local telephone number from anywhere in the world where they have high-speed internet access.

Competition background

In September, the federal telecommunications regulator reaffirmed its May 2005 decision on VoIP service, ruling that bigger, traditional telecoms such as Bell, Telus and Aliant can't undercut smaller competitors or newcomers.

The CRTC also said that it would regulate internet protocol-based telephone service the same way as any local service, meaning that bigger, established companies could not offer competing VoIP services below cost.

VoIP newcomers can set any price they choose, the CRTC said.

911 and other features

Although 911 emergency service is available over VoIP phones, it differs from the one offered through traditional telephone service providers.

Traditional 911 service routes the call to the nearest emergency response centre and displays the telephone number and address from which the call originates.

Vonage's 911 service routes calls to a national call centre, where an operator confirms location information before transferring the call to a local 911 response centre.

The service does not function during a power outage or if internet or Vonage service is disconnected.

Features such as call waiting, caller ID and voice mail are also available, the subsidiary of Vonage Holdings Corp. of Holmdel, N.J., said in a statement.

Vonage charges about $20 to $40 a month for residential service.