Time to ditch your land-line phone for VoIP?

By Liz Pulliam Weston

You no longer have to be held hostage to your phone company. Internet phone calling, according to those who have adopted it and analysts following the industry, is an option that's ready for prime time.

In past columns I have used the word "evangelical" to describe people who have TiVos and other digital video recorders on their television sets. The same word applies to many of the 1 million customers who have switched to Vonage or one of the other so-called Voice-over-Internet-Protocol, or VoIP, phone systems.

Both sets of fans tend to be:

• Greatly impressed with the quality and features of their systems.

• Amazed at the low prices they're paying.

• Eager to convince everybody around them that they should switch.

"I recommend it to everyone that will listen," said Travis Mack, a fire sprinkler engineering technician in O'Fallon, Mo., and a Vonage customer. "I truly believe that VoIP is the telecommunications wave of the future."

Forget phone lines

Internet calling services are designed to replace both your traditional land line and your long-distance provider.

Instead of accessing phone lines or wireless networks to place your calls, the systems use your broadband connection. Your phone is connected to an adapter box, which in turn is connected to your cable or DSL modem.

VoIP packages typically include, among other features:

• Unlimited local and domestic long-distance calling.

• Voice mail, call waiting, call forwarding, caller ID.

• The ability to keep your current phone number or choose a new number with any area code you want from the provider's list.

Vonage is the biggest player so far, with nearly 40% of the market. Other independent providers include 8x8, Net2Phone and VoicePulse. AT&T has a service as well, called CallVantage. The monthly cost is $20 to $30, although most services have a bare-bones option with limited minutes for $9 to $15.

Now cable companies including Comcast and Time Warner are making big pushes into the market.

Comcast launched VoIP in three markets last year -- Philadelphia, Indianapolis and Springfield, Mass. -- and plans to offer it to half of its 21 million customers by year-end, said company spokesman Bob Smith. The cable provider calls its offering Comcast Digital Voice, to distinguish it from its older phone service, Comcast Digital Phone. (Like some other cable companies, Comcast has long offered phone service using old-style "circuit switched" technology, using Internet protocol to send calls is a newer -- and less expensive -- innovation.)

The cable companies tend to charge more: $35 to $55 a month, depending on whether or not you get television and broadband from them. And though they use the same technology to break voice calls into digital information as the other VoIP companies, cable providers use their own networks rather than the public Internet to transport calls, Smith said.

Finally, one other player has announced plans to get into the market. AOL recently said it would offer the service to its 22 million subscribers, but it hasn't revealed its pricing.

Unlimited calling, free services

The unlimited free local, toll and long-distance calling that Mack gets with Vonage allowed him to drop his land line and opt for a cheaper cellular plan. He's also started to use -- and like -- the free services, like caller ID and call forwarding, that he didn't use with his previous phone company because of the expense.

Mack also likes the fact he can get his voice mail by e-mail, a service his former provider didn't offer, and that he can take his Vonage service anywhere he travels that has a broadband connection.

"I have taken my (Vonage adapter) box to another state and had my telephone number ring wherever I am," Mack said. "You are not tied down to a permanent location with a telephone number like you are with a land line."

All this for $8 a month less than Mack was spending just for his land line. Mack figures he saves at least $23 a month, and far more when he considers the many months in the past he went over his cell-phone minutes limit, racking up as much as $100 a month in overage charges.

Continued: A few challenges

 1 | 2 | next >