Ask the Readers: How to Choose VOIP Telephone Service?
Published on - February 22nd, 2008 (by J.D. Roth) Lauren recently wrote with the sort of technical question I usually route to the Get Rich Slowly forums. (The forums are a great place to get help with your specific financial situation.) She’s looking to ditch her landline for VOIP (voice over IP) telephone service. I’ve had several friends ask me about this subject, so I figure it has fairly broad appeal. Lauren writes:
I’m trying to find real information on savings for phone service — not hype from a service provider.
The cost for my landline is getting outrageous. I know that new competition is a benefit to me — I can even keep my same phone number — but what’s the best option?
I need a long-distance phone line since my clients are across the country. Due to my need for quality voice communications, a cell phone is not an option. I have to talk to clients and not experience dropped calls. Several friends have mentioned Skype, Vonage, and other Internet-phone services, but I can’t find good information on the options available.
I was wondering if Get Rich Slowly readers could offer their opinions, both pro and con, on what they’ve experienced: price, service, access, etc. How does a person choose VOIP telephone service?
I’ve only been on the receiving end of internet-based phone calls. None of them sounded as good as an actual land-line, but they generally sound better than a cell phone. I have no idea how much they cost. I don’t know the pros and cons of the various services.
What’s the most cost-effective means you’ve found for obtaining quality internet phone service? Are there other considerations Lauren should be aware of? Do you have any general advice on the subject?
This article is about Ask the Readers, Choices, House and Home
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I LOVE Skype. I got it as a “business line” and I doubt any of my clients know that I’m not calling them from a landline.
Call quality is good, reliability is good (and my setup is usually handset-plugged-into-laptop-using-wifi-network) and price is great.
Skype doesn’t seem to do outgoing caller ID though which drives me nuts. Other than that it’s fantastic.
And isn’t Vonage going bankrupt or something? Though they must be doing something right if so many people like them.
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We have a Skype hardware phone so that our SkypeIn and SkypeOut systems can be used when the computer is off. I think the overall cost for having a local number is about $70, and we paid like $150 last year for the hardware, but the cost has come down now. No cost for any calls in the US, I think there might be a slight charge for international.
We basically haven’t had any problems other than that caused by the unreliability of our cable modem connection. There might have been some calls that never rang, although we did get the messages left. Maybe if we used it more we would notice more problems.
The structural downside is there is no 911, but we both have cell phones, so we didn’t think that was essential. Also the Caller ID on the other end of the line just shows up as 123456789, instead of a real phone number.
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Another vote for Skype; at $70/year for Skype In/Out, you can’t beat it and the P2P thing doesn’t bother me. Not only do I use it at home but when I was in Guatemala last year the calls were 2 cents per minute on my laptop back to the US (as opposed to the outrageous hotel rates). Call quality is good and it’s more portable than many of the other VOIP carriers since it’s totally software based with no external modem. I did shell out the money for a cordless voip phone too so I can use that anywhere there is a open wireless network.
Like the others said, no 911 and caller ID can be a bit annoying, but for the savings, it’s worth it. The people that you really want to talk to will eventually figure out the 123456789 is you.
As a side note, I did have Lingo for a short time and had problems where the connection dropped and kept having to reset the connection by unhooking the modem, so the wired thing didn’t work for me. Sounds like from some of the other VOIP users, this isn’t a problem for them.
Maybe I’m old school though as I haven’t totally given up my landline yet, but am considering it (which I just wrote about in my blog).
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I would say that Skype is the winner; low cost and works pretty well… however, realize there is no 911 and that faxing over it is pretty much a no-go.
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As a former sunrocket voip user, I was forced to pick another voip system. I picked vonics and boy am I sorry I pay $15/mo for 500 outgoing minutes. Sunrocket was great – I had it for a year before it suddenly went belly up and I had no phone. Vonics is down about 1 in 10 times I try to use the phone (which isn’t that often). If skype requires “their” phone, I would think that is a bad thing. My ex has grandcentral and it seems to do well.
I would say that voip is not as stable as land lines yet. They have a ways to go. But sunrocket was definitely the closest thing to perfection and I really miss my $8 per month bill where I paid $200 for 2 years of service.
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First thing to realize is that VOIP is not your only option if you’re looking for bargain basement long distance prices.
I’ve been using a company called Enhanced Communication Group (ECG) for a few years now. I pay ridiculously low rates for long distance. My long distance bill has NEVER exceeded $10 with the monthly average near $3.
I’m looking at my bill for Janury right now. It’s above average at $6.16. It’s for Long Distance and Local Long Distance. The breakdown is 166.1 minutes of talk time in 30 calls. That adds up to $5.06. The rest is taxes. There is no monthly minumum, no flat rate, nothing. I only pay for the time I talked.
I’ve told many people about ECG and everyone always thinks there must be a catch. There isn’t. I don’t work for them. Just a very happy customer.
Switching to ECG is easy. It takes a few minutes using a phone based tool. You place your order on their website and they call your home phone number to confirm that you really want to switch. You confirm, and you’re done.
Look into it!
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I switched to Vonage several months ago and never looked back. I subscribed to the annual plan, where you pay $240 at once and you have unlimited calling for 12 months to anywhere in the US, Canada the UK and more. Plus you get tons of features for free such as voicemail, email notification of messages received, caller id, anonymous call block, etc.
One think to note, however, is that if your power goes out, or your internet connection goes down, you are out of a phone. I’d recommend a battery back up if you are subject to power outages.
Go for it!
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Recently through a tech newsletter I subscribe to, I read about an Internet phone called magicJack. This is a relatively newcomer on the scene. They are offering a 30-day free trial, after which, if you choose to keep the magicJack, the cosst is $39.99 for the first year, $19.99 for each year afterwards. With this sighup you get a free local phone number, voice mail and all the frills of a landline! I signed up immediately, the magicJack arrived within 4 days of placing the order, and the installation was a breeze! It plugs into a USB port, and then you plug any regular telephone into the magicJack. The clarity is every bit as good as our cell phone service, and sounds no different than an old landline. I did notice the delay to place the call, but it’s never been more than a few seconds.
http://www.magicJack.com
Check them out!!
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I recently began researching VOIP providers and came across the website http://www.voipreview.org. They have links to all the individual providers’ websites, package-comparisons, and most importantly customer’s reviews. I think it’s a good starting point so you can see what is available right now, and coupled with all the other comments left for this post, should be able to find what you need at a great price.
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I’m shopping for home VOIP service right now, too. The biggest sticking point so far is that there is always an extra charge for faxing. I don’t necessarily need a “dedicated” fax line and certainly don’t want a whole extra piece of hardware for it Some providers I’ve found require a separate router for the second line; I think Verizon offers a device with two jacks in one piece of hardware, but you still pay extra for the service. I’d be happy if I could just put a line splitter in, but I’ve heard mixed reports about whether that works or not.
For what it’s worth, my top contenders right now are Vonage and Verizon.
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Another Skype user here. I’m happy with the service considering the cost ($3/month for unlimited outgoing calls to Canada and the US), but I do have to admit the call quality can be variable. Sometimes it’s great, I regularly call a friend in Australia and she couldn’t believe I wasn’t on a land line. But just now I called a friend in Toronto on her cell phone and there was definitely a bit of a lag. And people definitely notice the caller ID thing, a lot of people I call always sound so suspicious when they answer because they’re thinking “what the heck is this random number?” For personal use I think it’s great but I’m not sure I would jump right in and use it for business without a solid back-up.
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I use Vonage for 3 lines (2 voice, 1 fax) over a cable connection and it works just fine. However, I couldn’t run 1 on my DSL.
Vonage’s $24.99 plan costs me $32.77 after taxes. I’m watching my usage, though, as I think I can drop to the $14.99 / month plan and save a few bucks. I use less than 300 minutes per month (60% of the 500 included in the $14.99 plan), so I have room to use more and still be under the limits on the lower plan.
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I have been using Comcast Digital Voice for nearly two months. Call quality is as good as analog. There is a battery backup although I have not needed it yet. I feel this is a better option than Vonage, etc. because Comcast controls more of the network the calls are being routed on (see previous comment about ‘traffic shaping’). It also works with my monitored alarm system.
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I also have been using Lingo. This works for me partly because I have friends in Canada, the UK, and even Germany. For all calls to those countries and the US, I pay a whopping $0.00/min. The cost is about half what I was paying with Talk America (I think they use another name now) and I don’t have to worry about long calls to chatty friends.
I have Comcast for internet, so my reliability of service could be better, but I don’t have that much in the way of vital traffic, and I have my cellphone for fallback.
I have never had to test 911, I still have the direct numbers of the local emergency agencies taped on the wall by the kitchen phone. I hope they haven’t disconnected them in favor of 911 like so many idiotic agencies have done.
For Lauren, I would suggest the following: Take all the names of active companies mentioned in this thread. Look back over your last years phone bills (or as far back as you have on hand if a year isn’t possible) and compare that calling pattern with the plans available. Then look around to web sites like Broadband Reports for reviews of services for the companies that fit.
On reliability, I can say that my Lingo service has been down for less than 2 hours that I know of over the last 4 years for non-comcast-related reasons.
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I use the phone service provided by the cable company which is a type of VoIP. The call quality is excellent ( no dropped calls and not static ) and no even know I am using VoIP. It uses regular phones and the wiring in the house, I kepy my phone number, and the equipment has it’s own powersupply.
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For the most part VOIP service is becoming a commodity. So you basically get the same service from any provider as long as you have a good, solid Internet connection. In my experience cable Internet works best for VOIP and if you have a “QoS” router you can avoid problems with torrent downloads or gaming interfering with VOIP traffic. (Not a problem if you don’t download torrents or game.)
The way the providers can differentiate themselves is through:
features
local and international plans
price
fees
referral incentives
local phone numbers
longevity of company
customer service
tech support
So I would compare all of these in making a decision to best suit your needs.
It sounds like you need a phone service for regular phones so a service like Skype or MagicJack would not be a good solution.
With a VOIP hardware provider (they give you a VOIP adapter you plug into your Internet and phone) you can disconnect your phone line from the telephone company coming into your house to create a closed loop. Then you plug the VOIP adapter into a phone outlet and all the other outlets will have VOIP service.
I would stay away from Cable VOIP as the price is too high for what you get and they tend to have large cancellation and setup fees. Plus they aren’t as mobile as more generic providers.
I would look at Vonage.com, Packet8.com, Lingo.com, or my personal favorite ClearDigitalVoice.com. Most give away the first month free, so feel free to get a trial to see which one works best.
ClearDigitalVoice.com is a little known provider that has all the regular features (voicemail to email, call waiting, callerid, 911, unlimited long-distance etc.) but it is cheaper than others (price due to fees and taxes is just a few dollars above flat rate), NO setup/cancellation/overseas fees, very reliable, free calling to Europe or Asia, great referral program, free softphone to use on your computer when away from regular phone, been around since 2003, and Canadian tech support. Plus they can get/transfer local phone numbers to pretty much anywhere.
Good luck in your search I know it can be overwhelming to look at all the different options.
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Most VoIP service has now become a commodity. So it doesn’t necessary matter which provider you use as long at it suits your needs and you have fast upload and download speeds for your Internet.
When comparing VoIP providers look at:
price
local and international plans
reliability
features
setup/cancellation fees
referral program
available local phone numbers
911 availability
longevity of the company
customer service
tech support
My experience has been that cable Internet is great for VoIP service. But that the VoIP sold by cable companies is overpriced and there are large setup and cancellation fees with fewer features.
Plus Cable VoIP is tied to your cable service. It is much better to have a VoIP service that can work with any Internet connection, especially if you travel.
It sounds like you need VoIP service that is compatible with regular telephones so Skype and MagicJack aren’t good solutions.
I would go with a generic hardware based VoIP company like Vonage.com, Lingo.com, Packet8.com, or my favorite a little known provider called ClearDigitalVoice.com.
Hardware base VoIP providers allow you to hook up all your phone outlets to VoIP. (To do this disconnect the incoming telephone line to your house from your local telephone company. This will create a closed loop in your home telephone wiring. Then plug your VoIP adapter into a phone outlet and the rest of the phone outlets will have the same VoIP service.)
I like ClearDigitalVoice.com because it has all the regular features (voicemail to email, call waiting, callerid, etc.) plus it cheaper than most, reliable, has NO setup/cancellation fees, great referral program, Canadian tech support, free calling to Europe or Asia, great international packages to places like Mexico or India, the parent company has been around since 2003, free softphone to use on computer when phone isn’t available, and has local telephone numbers to just about anywhere.
Good luck in your search. I know selecting a VoIP provider can be confusing with all the options available.
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One thing to consider when looking at VoIP companies is that there is an advantage to using one that is bundled with their own VoIP service. For example, Speakeasy or Cbeyond require you to use their broadband service, but they can guarantee priority of voice packets on their entire network all the way to your house or office. Vonage, et. al., cannot.
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Some people have asked to see my bill. Basically there are $3.00 in regulatory fees in addition to the monthly flat rate.
Here it is:
“Due to recent FCC and CRTC legislation 911 service is now required on all VOIP phone lines and a $1.50 recovery fee will be levied on all users effective Jan 1, 2007.
Service Charges
No Date Description Amount
1 2008-02-24 MYDV_com Popular Unlimited Contract: (Feb 24, 08 – Mar 23, 08) 19.99
2 2008-02-24 911 recovery fee US: (Feb 24, 08 – Mar 23, 08) 1.50
3 2008-02-24 Regulatory Recover Fee: (Feb 24, 08 – Mar 23, 08) 1.50
4 2008-02-24 Unlimited Europe Select USD: (Feb 24, 08 – Mar 23, 08) 9.95
5 2008-02-24 Unlimited Europe Select USD: 100% Discount (Feb 24, 08 – Mar 23, 08) -9.95
6 2008-02-24 LD Charge: (Jan 24, 08 – Feb 23, 08) 0.00
Total Service Charges 22.99″
http://ClearDigitalVoice.com
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I liked Joe’s idea of putting out there just exactly what a monthly bill looks like for these various VOIP services. This information can be quite hard to come by otherwise. So here is my last Vonage bill.
Residential Basic 500 Minutes Plan for 1-(XXX)-XXX-XXXX (29/Jan-28/Feb) $14.99
Regulatory Recovery Fee $0.99
Emergency 911 Cost Recovery $0.99
Federal Universal Service Fee $1.27
Total Amount $18.24
Like I said before, I like Vonage because 1) there is no hardware cost (rebate for Vonage hardware, uses your existing phone and wires) and 2) I just plugged it in and it worked.
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I have MagicJack from magicjack.com. I’ve used their services for about 6 mo and like it so far. It’s an add-on device for your computer’s usb port (one end connects to your computer and the other to your landline. I have a phone base station directly connected to it and 4 wireless headsets in different rooms. As such, you’ve got to keep your computer on. It has all the standard features, call id, voice mail, unlimited local/long distance and no monthly statements. The voice quality is pretty good considering you’re not sucking bandwidth by other p2p/gaming services (all VoIP would it affected by high bandwidth activities, alternatively, you can prioritize services through your modem/router). It costs initially $30 for the 1st year (that’s right, a year) along with a free trial and $20 for the 2nd year. One of the features I like is their voice mail system. If your connection/computer is down you can still receive messages which are routed to your email as an attachment. And one more thing, you get a free trial.
By the way, I just started a blog at prudentmetrix.com, feel free to visit.
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@Jeff J. Snider: I chose AT&T CallVantage over the other options mainly because their support is (relatively) good and located in the US. So far, I’m pretty happy. In most cases I’ll even spend a little more to support a company that keeps their support in country, but AT&T prices are about the same as Vonage, et al. Actually, if you’re an AT&T Wireless customer they’ll even take an additional $5/mo off.
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Another option is Primus; we’ve been using it for nearly 2 years, unlimited local and North America long distance, for under $40CAD a month.
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“Cheapest would be Skype. Dialout is free. Dialin is $60/yr ($5/mo).”
Wrong, Gizmo is cheaper. Dialin is $3 a month. I haven’t tried it, but their dialout has been working fine for me. gizmoproject.com
I strongly dis-recommend Skype because it’s a proprietary application, doesn’t use the Internet standards for VoIP, and hence isn’t interoperable with anything else. (Whereas Gizmo can talk to, for example, Wengo.)
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Some VoIP systems plug into the router. However, if you don’t mind keeping the computer on, I recommend the http://www.MagicJack.com. They intend to be partially advertising supported in the future so the low price is likely to stay, barring any full frontal assault on VoIP by the powers that be.
We use it for daily calls from/to the Philippines (house remodeling with our nephew caretaking the place). He can call any number in the US. We can call him overseas by calling that Magic Jack number which has a local (to us) number assigned. My mother across the country could call that phone too, but her charges would be like calling Fort Worth.
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I used Skype for a couple years over my cable modem line. If you’re going with internet telephony, it’s a great option, and the price is good. The audio quality is phenomenal, most of the time. But there is a latency most of the time, and sometimes it’s up to a couple seconds. That means that there is a period of time, a lag, between when you talk and the other person hears you. Same thing both ways. Most of the time it’s no bit deal, but sometimes that makes it hard to have a natural conversation. I ended up springing for a landline instead for my business. In fact, my “landline” is a digital voice line from the cable company. The fact that it’s using VoIP technology is irrelevant. What matters is that it’s using dedicated bandwidth and not the internet.
So, if you’re running a business, I recommend you do not rely on internet-based telephony, but get a dedicated, wired voice connection of some kind.
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A warning about T-Mobiles ‘unlimited’ Hotspot@Home service. The $10 fee for unlimited calls applies only to ELIGIBLE contracts. I’m still serving time on a contract that I signed before an increase, so for me it would have been $20 a month for the unlimited use.
I kept my original contract and have come out ahead on the expense.
That being said, the wireless VOIP works fine without Hotspot@Home, and I can now reliably receive calls on my mobile at home.
You can also save money with T-Mobile by using a third party wireless access point, but BE WARNED: If you admit to using a non T-Mobile access point, they will blame it for ANY and EVERY problem you call support for. I spent over an hour on the phone (land line) one time trying to convince them that the problem was at their end. Eventually, they acknowledged that the problem was with a cell tower and resolved it.
There is also a potential security issue with T-Mobile’s access point. While on a walk in a residental, I noticed my phone had switch to UMA. It had spotted a residential wireless router with the pre-configured Hotspot@Home SID and latched onto it without asking either me or the neighbor permission. I don’t own one of T-Mobile’s routers, so I don’t know for sure, but I’m guessing that they are all configured to let strangers use your service.
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On MagicJack – Beware
This did not work well for me in Hawaii: No local area code available, people I called all told me the sound was terrible, two attempts to call every number I tried to reach, no service even though my PC is on 24/7 after my PC automatically reboots with scheduled updates. I’m still trying to get my money back after 3 weeks of returning the jack, they issued me a partial refund for the equipment but no refund on the 5 year Platinum plan that I paid in advance. Will not recommend them unless your neighbor is getting good result.
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