Saving with VoIP: The Vonage option

You've heard the pitch: Sign up with Vonage and get your first three months for only $9.95! It is really that simple? Not quite. I signed up and set up the service on one of my land lines this week to try it out. So far I've been pleased with the results.

Vonage: A survival story

Vonage positions itself as a full featured land line replacement telephone service. It's a voice over IP (VoIP) service, which means it requires a DSL or cable broadband connection to work. If you don't have broadband already that's an extra cost. But Vonage is going after those who do. Among that group, most have not moved off of their land line phones to VoIP (although consumers are increasingly discarding land lines entirely in favor of their mobile phones). I can't do that. I use too many minutes on my land line to make that cost effective.

Vonage says its primary competitors are the telephone companies and cable companies. The latter have their own VoIP offerings (both Verizon and AT&T dropped their VoIP offerings over the past year). The granddaddy of VoIP, Vonage, which claims 2.6 million subscribers, is the biggest of the truly independent, dedicated VoIP providers. And it's a survivor. After facing legal challenges from telcos that nearly put them out of business, Vonage has emerged intact. Although the fortunes of its cable competitors and their VoIP offerings are rising much faster, Vonage is cheaper and the call quality so far has been very good.

Vonage considers its biggest competitor among the independents to be Magic Jack, probably due to its potentially disruptive pricing model - it's just $20 a year after you buy the $20 Magic Jack USB adapter for your PC. But Magic Jack has a fairly limited feature set. It requires that your personal computer be turned on to make or receive calls. You can't port your existing telephone number to Magic Jack yet - and you can't port the number it assigns to you to another service (Isn't number portability an FCC requirement?).

Note: I explained these and other Magic Jack pros and cons last week. You'll also find other reader comments about Magic Jack here.

What's to like

The basic price of the Vonage service is $24.99 per month, plus the cost of broadband service, if you don't have it already. That includes unlimited local and long distance calling and a wide range of features. Here's what I like about Vonage so far:

  • Portability. Periodically I move between two offices, and when I do I unplug the Vonage V-Portal device (the 5 x 5 x 1 inch unit slides easily into my laptop case), and set it up in my secondary location.
  • SimulRing, a feature which, like Google Voice, allows incoming calls ring on up to five different phone numbers simultaneously. That might include your family's cell phones or phones at a summer home, office or other residence.
  • Failover number for incoming calls. If your broadband connection goes down so does your phone. But you can configure Vonage to automatically route incoming calls to a cell phone or other alternative number whenever service is interrupted.
  • Voice mail by e-mail. You can retrieve voice mail using your phone, but I like having incoming voice messages delivered to my e-mail inbox as .WAV sound file attachments. For an extra fee, Vonage will convert those .WAV files to text. In this way you can read incoming voice mail while on a conference call for one of those long company meetings.

Certain reservations

I also had some initial reservations about Vonage. These included the volume of online complaints about its customer service, some issues around the terms of service and various cancellation fees, and getting the right answers from the sales call center.

If you want to make and receive calls in an office setting you use Vonage's V-Portal device. If you want to make calls on the road you use a USB adapter called a V-Phone with a "soft phone" dialer on your laptop. Could I use both, and have them associated with the same phone number? Yes. No. Maybe.

I'll talk about that next week.

Copyright © 2009 IDG Communications, Inc.

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