Internet Phones / VoIP
Given my never-ending quest to save money, I was quite intrigued when I heard about the potential of internet phone services. Free of the regulatory taxes applied to existing carriers and not required to make the capital investment in hard wiring everyone’s homes, internet phone companies are able to offer a variety of services at comparably low prices. There are a number of companies out there and it can be difficult to choose the right one to fit your needs. I can point you to a good service that I personally use -- believe me, I am not being compensated for this recommendation -- but, depending on your needs, you may want to shop around before making a final decision.
What is VoIP?
VoIP stands for Voice Over Internet Protocol. Basically, it’s just a fancy way to say “internet phone.” There are a few free downloads (such as Skype) that allow you to use a headset and your computer to talk to other people also using the program, but my desire was to seamlessly replace my existing phone service, so my focus is on companies that are able to do this.
How does it work?
These internet phone services generally require you to have an always-on broadband connection. For most of us, that means it requires a DSL or cable internet access. Since DSL generally requires a phone number (and usually regular phone service), the greatest benefit of internet phones will be enjoyed by those with cable internet.
Typically, you plug your phone into a box provided by the company (usually a router or some other type of gateway) and that box is connected to your broadband connection. When you make a call, you are connected to the internet phone service and the call is relayed directly to someone else’s internet phone (if they also subscribe). Otherwise, you are connected seamlessly to their local phone network to complete the call.
What are the benefits?
Cost – In my case, I was paying around $30 every month to SBC for local calls along with an additional $5-$20 to a long distance carrier (at a rate of $0.07/min) for my long distance service. I ended up going with the Vonage $15 plan that offers 500 minutes to the US and Canada -- each additional minute is $0.04. Once everything is complete (I’m waiting to have my home number switched over), I will be saving $20-$35 a month which will almost pay for my cable internet service. Vonage also offers a $25 plan that offers unlimited calling, but this plan was overkill considering my phone habits.
Flexibility – In many cases, you are not tied to any local exchange so you can pick any area code you want. If you move, you can take your number with you and you don’t have to worry about canceling your local phone service.
Features – Vonage offers a bunch of free features, ranging from the typical caller ID to voicemail. You also have the ability to check your voicemail online or have your calls automatically transferred to another number if they see that your internet service goes down. Due to the non-local nature of internet phones, 911 calling used to be an issue, but now most services allow you to activate it once your line is set up.
What are the disadvantages?
Complexity – At this point, internet phones are not for everyone. They require some moderate technical skill to install and depending on the company, troubleshooting can be a headache. It’s a bit easier than setting up a home network or installing new hardware in your PC, but it is still not for the faint-hearted.
Call Quality – I originally signed up with Lingo, another internet phone service, and the call quality was quite poor. I noticed echoing and delays on phone calls. I tried to get the issue fixed but my tech support calls were answered by people over in India and they could only solve the most basic of issues. It became obvious that Lingo’s service was not up to snuff and I cancelled. I did a little more research and have noticed that Vonage’s call quality is much better -- it’s on par with your local phone company. The only echoes and delays I notice are on calls to people with cell phones and I think the problems are on their end, not mine.
Who offers VoIP?
The following companies currently offer some sort of internet phone service. Click on the company name to read the cnet.com review.
In summary, a few internet phone services are able to provide adequate to excellent phone service for adequate to excellent prices. For the typical user -- moderate use with mostly domestic calling -- Vonage is a good place to start. As with most monopolies, your local phone companies are probably already feeling the pinch but will no doubt be slow to react (i.e. Blockbuster’s “new and exciting” rent movies via mail service -- a carbon copy of the innovative Netflix model). In the meantime, if you have some technical know-how, you can cut your phone bill in half -- at least.
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