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Morale: VOIP Vanquishes The Cards
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September 27, 2008: The U.S. of phone cards (to pay for telephone calls home) in Iraq has fallen from 12 million minutes (at about 20 cents a minute) a month last Fall, to about half that now. The main reason for this has been the introduction of high-speed internet at military bases. This was made possible by the construction of high speed internet links into Iraq, where the there was very little access until Saddam was overthrown in 2003. With high speed connections, troops can make voice, or even video, calls to back home, at no (or very little, like a penny or two a minute) additional cost. This has proved to be a big boost to morale.

In 2004, AT&T was asked to set up pay phones throughout American bases in Iraq and Afghanistan. AT&T set up 64 calling centers, with nearly 2,000 pay phones. The phones were connected, via a satellite link, to AT&T's international fiber optic network. The fiber optic part of the system is cheap to operate, costing a penny or two per minute for phone calls. The satellite part is more expensive, as was the cost of building the call centers and installing the phones. To cover the costs, AT&T was given an exclusive deal. You could only use AT&T calling cards on the AT&T phones. It cost about 21 cents a minute to call someone back in the United States on this system. When first installed, this was a good deal, because the phone systems in Iraq and Afghanistan were still in a shambles, with many people using satellite phones (which cost 50 cents to a dollar a minute.)

By 2005, the telephone systems, particularly in Iraq, were largely rebuilt, and international calls were a lot cheaper. But even as the Iraqi phone system was being rebuilt, the U.S. Navy got a contract to build several hundred Internet Cafes in Iraq and Afghanistan. These would have fast enough Internet connections to allow the use of VOIP (Voice Over Internet Protocol) phone calls. These cost 4-5 cents a minute. But the PCs at the Internet Cafes were in heavy use, and many troops were stuck with the AT&T phones. There was much agitation in the ranks for change.

In the last three years, high-speed Internet access has spread in Iraq and Afghanistan, at least to the Internet cafes set up for the troops, and this has led to the pay phones getting much less use.

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