Microsoft has announced that it plans to follow BT and Yahoo's announcement last week to step up the fight against VoIP competitors such as Skype with the launch of a new VoIP package.

Microsoft has joined forces with MCI's VoIP network services to include voice calling support via Microsoft Windows Live Messenger to enable customers to place calls from a personal computer to virtually any phone.

The solution, MCI Web Calling for Windows Live Call, will be available through Windows Live Messenger, the upcoming successor to MSN Messenger, which has more than 185 million active accounts around the world.

MCI and Microsoft are testing the service as part of a Windows Live Messenger limited beta with subscriptions initially available in the United States, and expect to jointly deliver the PC-to-phone calling capabilities to France, Germany, Spain and the United Kingdom in the coming weeks.

Once subscribed to the service, customers can place calls to and from more than 220 countries with rates starting at $.023 per minute to the US, Canada, the UK and Western Europe during the beta testing period.

Upon sign-up, MCI Web Calling customers will receive up to 1 hour of free calls. Final pricing will be determined when the product officially launches in 2006.

"Our customers are going to love this" said Blake Irving, corporate vice president of the MSN Communication Services and Member Platform group at Microsoft.

Customers will be able to sign up for MCI Web Calling via the Windows Live Messenger client. MCI will manage customer registration, terminating calls, customer account management, customer support and billing for the PC-to-phone voice service, and will work closely with Microsoft on delivering a high-quality software service and customer experience.

Customers will purchase prepaid calling time from MCI in $5, $10 or $25 blocks for use with the service.