New York ? Scott Rosenthal of Wellington, Fla., cut his monthly home phone bill by $150 but makes just as many calls as always, for work and pleasure.

Aby Alexander’s 30-person Internet company in Cambridge, Mass., is saving $900 now that he and his colleagues can call New York and London without paying long-distance rates.

Aby Alexander, president of Exstream Solutions, demonstrates his web telephone service at his office in Cambridge, Mass. The unlimited service allows him to make calls worldwide for 0 a month.

Both are using a new service that performs a technological sleight of hand: It translates phone conversations into data bits that get whisked over the Internet or private networks rather than through the traditional phone system.

The technology has been around for several years, making serious inroads at the switchboards of corporations with high-speed networks. It also powers inexpensive international calling cards sold at convenience stores.

But few consumers have replaced their home service with Internet calling because the system had a reputation for sounding like two cans and a string.

Boosters of the technology now say they’ve worked out the kinks.

During the next year, cable TV providers and other companies increasingly will rely on the technology to offer consumers sharply reduced phone bills and new services such as online phone-message management.

Public phone pressure

Some analysts believe that if the technology takes off which would require overcoming its unsexy moniker, Voice over Internet Protocol, or VoIP it will replace the public telephone network that first took shape 125 years ago.

In the meantime, it could add to the pressure on the nation’s large phone companies which are also testing the technology and using it to route some calls and keep long-distance rates down.

“It’s a rare opportunity to fundamentally change and alter a business landscape,” said Jeffrey Citron, founder of Vonage, an Edison, N.J.-based VoIP company that says it has 2,000 customers, including Rosenthal and Alexander.

In the traditional phone system, calls are converted to electronic signals that traverse an elaborate network of switches and wires in a dedicated circuit that lasts the duration of a conversation. Regional carriers that own switches along the network take a cut of each call.

In the Internet-based system, calls are converted into packets of data for transmission, just like e-mails and Web pages.

Given priority status to ensure they arrive in real time, the voice packets speed across IP networks to a “gateway” near the destination. There, the packets can be reassembled into a regular analog call. If both callers are using broadband Internet connections, the packets may avoid the public network altogether.

Until recently, parts of Internet calls were often delayed or garbled by network traffic jams. But a newly invented network protocol handles calls more efficiently.

“The technology has improved within the last year to the point where it’s pretty much ready for prime time,” said Jon Arnold, a telecom specialist at the consulting firm Frost & Sullivan.

Vonage charges $40 a month for unlimited local and long-distance calling and includes services like caller ID, call waiting and voice mail. In comparison, the average American household’s monthly phone bills total $73, according to the Federal Communications Commission.

Getting connected

Subscribers need a broadband connection and must plug their regular phones into a Vonage-supplied adapter that converts calls into data. Users can pick phone numbers with distant area codes, meaning a retiree in Arizona can get a Chicago area code so his relatives back home can dial him for the price of a local call.

Backers of Internet calling believe consumers quickly will get hooked by new services not possible with regular phones. For example, your phone could have a Web page that would let you easily specify that calls from your boss should get routed straight to voice mail while a ring from the baby sitter should be forwarded to your cell phone.