Tuesday, February 03, 2004

Capitalize on your cable modem

Or your DSL line, or whatever other broadband you might be using in your house. One of the big hotpoints in telephony these days is Voice Over Internet Protocol (VOIP). Essentially, without getting ridiculously technical, a VOIP user uses the Internet to make phone calls. This is a really big deal and a really scary thing for regular phone line providers.

A big player in the VOIP market right now is Vonage. Vonage is one of the few VOIP companies that is connected to the Local Exchange Carriers in various cities, meaning that you can call anyone and are not restricted to only calling other VOIP users that have the same service. Vonage provides you with a black box -- plug in an Ethernet cable and plug in a phone. Their basic service costs $14.95 a month for 500 minutes anytime in the U.S. and Canada. On top of that, every plan includes for free the laundry list of what phone companies call "optional features": voicemail, caller ID, call waiting, call forwarding, call transfer, 3-way calling, and free calling to other Vonage users.

Looking simply at the math: If you are already paying $40-$60 per month (or less) for your high-speed Internet service and have one phone line with some services at $30-$40 per month (not counting long distance), you are paying $70-$100 per month for Internet and voice service. Alternatively, in the Vonage model, you would pay $40-$60 per month (or less) for your high-speed Internet service and $15 per month for your phone service, leaving a total monthly of $55-$75. Approximate yearly savings is $180-$300 per year (not counting long distance).

Even more interesting is that, regardless of where you live, you can choose a local number anywhere in the country. For example, if you live in LA, and your parents live in New York, you could choose a local New York number so that all of your parents calls to you are local calls and they pay no long distance charges.

Expect to see similar offerings from the likes of Comcast, Time Warner, and other high-speed Internet providers.

No comments: