Telstra has announced plans to release a VoIP service based on Lucent technology to residential customers in the 2005-06 financial year.

The announcement comes as existing VoIP products from relatively small telecommunications players begin to proliferate and eat into Telstra's PSTN voice calls market. Telstra's revenue from fixed line voice calls has been on a steady decline for some time, while its broadband revenue continues to grow.

In a release to the ASX, Telstra stated that up to 200 users were trialling its planned new VoIP technology called Telstra Softswitch.

In addition to voice over broadband, Telstra plans to offer users enhanced VoIP services such as click-to-call, email notification of voice mail, a self service web interface for management of calls and functions and multimedia services such as video conferencing.

In typical Telstra fashion, the carrier has used its strategy of waiting until its smaller competitors have conditioned the market to accepting the new voice calls technology before taking the plunge itself.

Whether Telstra can dominate the VoIP market, which already has a number of providers supplying consumers with free to dirt cheap voice calls, remains to be seen. The carrier obviously believes it can but perhaps Skype and others have different plans.