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Paid Subscription VOIP: Dead in 5 Years Print E-mail
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House - Utilities
Written by Omie Ismail   
Thursday, 18 February 2010 03:41

For the last five years, I've been a happy Vonage VOIP customer but with the proliferation of broadband both here and overseas, I'm going to go out on the limb and project that, five years from now, there won't be a market for paid VOIP subscriptions. With the increasing speed of the internet, services like Skype are getting better all the time and they offer features such as videocalling and integrated messenging that make paying much for IP telephone unwarranted. Aside from the 'Skype factor,' unlimited mobile phone calling plans are reducing the incentive to use VIOP for domestic calls. Add to Vonage's woes, the new nimble VOIP  competitors who are entering the market with lucrative pricing models. 

Here are a couple reasons paid VOIP on the order of $20 a month or more is on the way out.


I recently started using Skype for both regular calls and Video calls to family. After my initial experience, I'll never use Vonage for domestic calls again. With the improvement in cheap video cameras and devices that have better microphones and speakers, video on Skype is pretty darn good. And it's free. While not everyone wants to talk through their computer, the unlimited mobile data plans and easy access to WIFI mean that in the future, you may not be video calling through your laptop, but rather through your phone, iPad or some other device. Couple that with the proliferation of these devices overseas and the need for paid calling goes away rapidly. If you really want to talk on a traditional phone Skype has an option for that too.

Unlimited Mobile Calling Plans

Both AT&T and Verizon recently announced cuts in the pricing of their unlimited calling plans. If you are a MetroPCS customer, you pay just $50 for unlimited voice, data, and texting. So paying $20 to a VOIP carrier for unlimited domestic calls is likely more than the difference between whatever plan you are have and the unlimited option. The mobile phone is truly becoming the only phone. So what does that leave the traditional VOIP player to focus on? International. The only reason to use a service like Vonage is to make cheaper international calls. Vonage has a great plan that covers unlimited calling to 60 international countries for $25 a month with a 1 year contract. However, if you make calls outside of those countries, there are significant additional fees. If you make enough calls, it would be cheaper for you to pay for the high speed connection of the family that you are calling just to be able to make free calls on Skype and get free video to boot.

Device VOIP

For a $250 upfront fee to buy a device, you can save yourself from paying a dime for domestic calls ever again. Ooma is a new breed of company debuting last year, that makes its money by selling you a device and never having to pay long distance or subscription charges ever again. While the cost upfront is steep, amortized over two or more years and Ooma is a pretty good deal. If you want to make International calls, they have a plan that costs a mere $4.95 a month. There are drawbacks - any company that gets all their money up front usually has weak customer service which is a common complaint of Ooma. But the same can be said of Skype and sometimes Vonage.

Cheap Calling Cards

As we mentioned before, another threat is the use of cheap international calling cards such as Telecom North America which can rival Vonage's rates. It takes a bit more work, but the calling rates will save a ton of money since there are no monthly minimums.


So if you are looking to cut your telecom costs further, it might be time to junk your paid VOIP line in addition to your old landline.


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