iAbstract The aim of this Masters Thesis is to propose to SYSteam Nät AB, a local Internet Service Provider (ISP) in Uppsala, Sweden, how to implement IP telephony in their existing IT-infrastructure as a service to their customers. Thus the perspective of the thesis will be that of a local Internet Service Provider. Three general areas are covered in the thesis: Market and Business Model, Technology, and Economics. Important issues for SYSteam Nät AB as an established local broadband Internet Service Provider are to both retain present customers and to attract new customers. Some believe that offering value added services such as IP telephony could do this. Implementation of IP telephony can be done in different ways to fulfil SYSteam Nät’s requirements. The analysis leads to a proposal of how SYSteam Nät could implement IP telephony. This involves many multi-faceted business, technical, and financial issues; each aspect is examined in this thesis. ii Sammanfattnin