Phone companies?
Answer:
what about them?
Talk Is Truly Cheap
By Kelli B. Grant
September 16, 2005
HAVE YOU LOOKED AT your phone bill lately? Chances are, it's not small.
Consumers spend an average of $36.30 a month for basic local phone service, reports market-research company TNS Telecoms. If you use long-distance service and get perks like caller ID and call waiting, your monthly bills could easily soar to more than $70. (And that's before the monthly cellphone bill.)
You can cut your phone bill by up to 50% with a range of new Internet phone services. Based on voice over Internet protocol, or VoIP, technology, these services use a broadband Internet connection to convert your voice into digital data and route it over the Internet. It's then picked up by a phone company at the other end and converted back into a voice signal. VoIP works with your own wired or cordless phone.
There are more than 15 VoIP providers (see chart below for a few of the big companies), ranging in price from $20 to $40 a month for unlimited local and long-distance (national) calls.
Company Plan Costs (Monthly) Other Fees Type of
Broadband
Connection
AT&T CallVantage1 $29.99 for unlimited local and long distance. (Subscribe online and get your first month free.)
$19.99 for unlimited local.
$49.99 for two lines of unlimited local and long distance. You'll pay $29.99 for an activation fee. Cable or DSL
Bbtelsys2 $24.95 for unlimited calling in the U.S. and Canada.
The company also offers what it calls its "NO Plan" — as in, no fees, calling limits or monthly bills — for $199 a year. None Cable or DSL
BroadVoice3 $9.95 for unlimited calls in the state of your choice.
$19.95 for the Unlimited World plan — unlimited calls within the U.S. and 21 foreign countries.
$24.95 for the Unlimited World Plus plan — unlimited calls within the U.S. and 35 select foreign countries. None Cable or DSL
Optimum Voice4 $34.95 for unlimited calls in the U.S. None Cable
Packet85 $19.95 for unlimited calls in the U.S. None Cable or DSL
SunRocket6 $24.95 a month, or $199 a year, for the Signature plan — unlimited calling in the U.S. and Canada, plus a $3 allowance for international calls. None Cable or DSL
Time Warner Cable7 $39.95 for unlimited calls in the U.S. None Cable
Verizon VoiceWing8 $19.95 for VoiceWing 500 — 500 minutes a month to anywhere in the U.S.
$34.95 for VoiceWing Unlimited — unlimited calls in the U.S. (If you already have Verizon DSL, you can get the VoiceWing Unlimited plan for $29.95 a month for the first 12 months.) You'll pay a $39.95 activation fee. Cable or DSL
Vonage9 $14.99 for the Basic 500 plan — 500 minutes a month to anywhere in the U.S., Canada or Puerto Rico.
$24.99 for unlimited calls in the U.S., Canada and Puerto Rico.
Subscribe online for either plan, and get your first month free. You'll pay a $29.99 activation fee. Cable or DSL
Although you can save a lot with VoIP, it isn't right for everyone. You'll benefit most if you:
Already have a broadband Internet connection (DSL or cable). VoIP service itself is relatively cheap, but the prices don't reflect what you'll pay for the necessary broadband connection, generally about $40 to $50 a month. If you have no need for a high-speed Internet connection, you'd get a better deal sticking with dial-up Internet service and a landline phone provider.
Spend a lot of time on the phone. Maybe you work from home, have teenagers, or just love to rack up the minutes (local and long distance) chatting with family and friends. In its February 2005 report, Consumer Reports recommends VoIP for "heavy telephone users" — people who spend more than $60 a month for local and long-distance calls, as well as those who use more than 110 minutes a month on long-distance calls or more than 1,000 minutes on a wireless.
Travel a lot. You can opt for a floating number, which means that no matter where you connect to your service, you're still calling from your home area code. (You'll just need to bring a VoIP adapter with you, and find a computer with Internet access.) So if you're on a business trip in another state or country, calling your kids (or the office) via VoIP is still considered a local call. Of course, to make this work, you'll need access to a broadband connection and a connected phone at your travel destination.
Make a lot of international calls. You can make long-distance calls using a VoIP. Rates vary by provider, but most are a few cents cheaper per minute than regular phone companies. A few plans even include calls to Canada and other countries in the regular unlimited monthly rate. Check the rates before you subscribe. VoIP isn't such a good idea if you:
Plan to have it be your only phone option. Right now, not all VoIP providers are equipped to let you dial 911. Some services haven't been integrated to the emergency calling network, and others have limited connectivity. Check before you sign up — you might find you want to have a backup landline.
Need reliable phone service. In month-long tests of VoIP services earlier this year, Consumer Reports found that calls didn't always go through, and were often dropped midcall. Testers also reported that voice quality often sounded "hollow" — a result of the caller's voice being converted to digital data and then back to a voice signal.
Narrowing the Field
Not all VoIP services are created equal. There are three steps you need to take to figure out your best option:
1. Start by finding out which providers serve your area. Because some VoIP services are offered through telephone and cable companies, you'll have a limited selection to choose from. Check out White Fence's Move Utilities10 to see the options in your area. Others providers, including Vonage and 8x8 Inc., are independent, and are available nationwide (see chart for full list).
2. Read user opinions. Do some legwork and find out how users have fared with the service or services you're considering. It's better to find out beforehand that all calls sound like you're calling from a really bad cellphone connection, or that one service has a nasty habit of dropping every third call. Some VoIPs do offer "money-back guarantee" periods, but they can be complicated (you must return all equipment within a set period, have spent no more than a set amount of minutes on the phone and so on). Check out sites such as CNET11 to find out how customers who have used VoIP rate the services.
3. Tally the cost. Make sure you'll pay less for VoIP than you would for a regular landline — but go beyond singling out the lowest monthly fee. Consider how much you'll have to pay for activating the VoIP service and buying the necessary equipment. Look for other fees that may kick in later, such as an installation fee if you run into difficulties doing it yourself, and a termination fee should you decide to end the service. If you'll be signing up for broadband Internet to use the VoIP, don't forget to factor in those costs as well.
Links in this article:
1http://www.callvantage.att.com/.
2http://www.bbtelsys.com
3HTTP://www.broadvoice.com
4http://www.optimumvoice.com
5http://www.packet8.net/
6http://www.sunrocket.com
7http://www.timewarnercable.com
8http://www.verizon.com
9http://www.vonage.com
10http://www.moveutilities.com/
11http://reviews.cnet.com/4520-9238_7-6262.
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