Rogers Cable has announced plans to go head-to-head against Bell Canada by providing local and long-distance telephone service to its customers using its cable network.

Canada's largest cable company said it hopes to launch digital voice telephone service for about 1.8 million homes and businesses mainly around Toronto beginning in the middle of next year.

It wants to expand that to most of its cable network, which includes systems in Newfoundland, New Brunswick and southwestern Ontario, by 2006.

Rogers is committing $200 million to fixed capital costs and deployment, with the bulk of that spending coming this year. The company estimates it will spend a further $300 to $340 per subscriber to add voice-over-cable telephone capability.

"Offering high quality primary line telephone service that includes local and long distance, as well as a complete suite of advanced IP-based calling features, will be a compelling addition to the collection of Rogers' services that we deliver today over our advanced networks," said Rogers Communications CEO Ted Rogers.

Bell Canada is facing increasing pressure in its phone business from several directions. Last month, Primus Canada began offering voice-over-internet phone service to its broadband internet customers.

Other cable companies are also mulling over jumping into the voice-over-cable arena.

Rogers Communications shares were down $1.05 to close at $25.83. BCE shares were unchanged at $28.99.