U.S. soldiers in South Korea face a tough call on using Internet telephony in the country.

Thursday was the last day the U.S. military community in South Korea could make VOIP (voice over Internet Protocol) calls through companies based in the U.S., such as Vonage Holdings and Lingo, according to a report Thursday in Stars & Stripes, a U.S. Department of Defense authorized newspaper. Beginning Friday, all new contracts must be made with South Korean VOIP providers, the report said.

For service members used to making and receiving calls to and from the U.S. for as low as $US15 a month, the move to a South Korean provider -- and a local phone number -- could ring up a pricey phone bill.

Because U.S. VOIP providers assign service members a U.S. phone number, these users can be reached from the U.S. without callers being billed for international calling charges. Prices for VOIP services in the U.S. vary from around $US15 to $US25 a month for unlimited local and long-distance calls.

South Korea's major Internet service providers, including LG Dacom, said in June 2006 they would block Internet calls through companies not registered under the Korean Telecommunications Business Act. But after U.S. Forces Korea Commander General Burwell Baxter Bell said the move would impact service members' quality of life, the companies agreed to delay enforcing the act until June 1, 2007.

Demand for VOIP services have surged as service members -- and many others -- seek cheap ways to communicate with their families, friends and business partners around the globe.

Vonage offers a VOIP service that replaces the traditional telephone. Customers connect their phones to an IP-transformation device, which connects to the home or small-business DSL (Digital Subscriber Line) or cable modem. Vonage doesn't offer PC-to-PC VOIP service provided by companies such as Skype.

Brooke Schulz, a Vonage spokeswoman, was unable to confirm whether the company's service is no longer available in South Korea and, if so, whether Vonage plans to apply for a VOIP license with the South Korean government.

Companies registered to provide VOIP service in Korea include Korea Telecom, Hanaro Telecom as well as LG Dacom.