SINGAPORE (Reuters) -- Singapore Telecommunications Ltd, Southeast Asia's largest phone company, says it has formed a partnership with a U.S.-based Internet firm to expand the use of the Web to make public phone calls.

SingTel said Monday it plans to offer the service in the current April to June quarter through a partnership with San Diego-based SIPphone Inc using Voice over Internet Protocol (VoIP) technology.

The deal would allow a user with SIPphone gear to place and receive calls over any public phone system, as well as to and from mobile phones worldwide, not just with other parties connected to the Internet.

Customers planning to use the new service would pay online using a virtual calling card system, a SingTel spokesman said.

VoIP uses the public Internet instead of traditional phone lines to carry voice calls, making them either free or heavily discounted.

The rise of VoIP technology in recent years has threatened to erode the revenues and profits of major telecoms carriers.

SingTel, which is Singapore's largest listed company, is battling heavy competition in its mature home market where more than four out of five people now own a mobile phone. That is prompting it to seek new revenue streams outside the tiny city state.

It has spent S$17 billion ($10.17 billion) in the last four years buying telco firms in high-growth Asian nations with fewer cellphone users such as India, Thailand and the Philippines, and in the bigger Australian market.

More than two-thirds of SingTel's revenue and half of its pre-tax earnings are generated outside Singapore.

SingTel shares are up one cent at S$2.34 in Monday trade

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