In general, the cost of voice communications has become relatively less expensive over time as technology makes improvements to the infrastructure and makes telephone switching cheaper and more efficient. However, there are various reasons for many consumers seemingly spending more on communications than they ever did before. It is also important for each family or business to step back and view their individual situations and goals because there truly is not a “one size fits all” solution that benefits everyone.
Marketing hype aside, the main reason for a lot of confusion is that there are so many more choices today. When there was no other option than the “plain old telephone service” (POTS) from Ma Bell, everyone pretty much did have a “two size fits all” plan that was about the same for any given locality. The two sizes were residential and business customers. Other than that, long distance was calculated on standard rates to different cities or countries, there was a flat phone rental fee and a standard charge for local service (which usually allowed unlimited free calls within a given locality). Today, however, different companies compete with different plans, different rates and often different hardware, which means everyone must do some research before settling in.
Research is even more important because a lot of companies still offer lower entry fees if the customer signs a contract (typically one or two year depending upon the service). There can be expensive penalties for breaking the contract, and if any equipment was subsidized for the contract (which is normal for many cellular plans), then part of the subsidized rate for that equipment might be expected to be repaid as well.
Other considerations are the size of the family, how much the user(s) actually talk per month, lifestyle (mobile vs mostly stationary) and reliability. Obviously, the more people involved, the more they actually talk and the less mobile they are, the more costs there are in cell plans vs landlines.
With a POTS system, the phone company often publishes a person or business in their white pages, which allows others to find them. However, this really is of questionable value, for it also allows telemarketers to find them. Also, so many people have given up on landlines altogether, not to mention the proliferation of the World Wide Web that can allow surfers to look up other people online, that the whole notion of being found might be considered overrated.
According to MSN Money article “Why I’m keeping a landline,” 36% surveyed in 2012 used their wireless service as their main service and had no landline phone at all. That was triple the percentage from just 5 years prior.
Striving to keep costs down will do no good if it does not meet the communications needs of the group involved. It might be counterintuitive, but having a landline might be cheaper for some families rather than others, and there may be other considerations more important than cost (reliable 911 service, for example). Areas with frequent power outages should also weight the benefit of a landline phone, which does not generally require power to operate unless it is cordless.
Having said that, there are alternatives, and not all of them are cell vs landline either. They will vary widely by savings and quality. The proliferation of voice over IP (VoIP) services make it even more difficult to whittle down the list of available services to consider. For many, perhaps even most, a combination of services would be the ideal.
POTS
A lot of the benefits of the normal landline have been discussed already, but it bears emphasizing that the cost can vary widely for certain areas. One blogger at The Finer Things in Life discussed her decision in “Cell Phone vs. Land Line” and came down on the side of keeping a dirt cheap cell service and a landline both.
Why? For one thing, the POTS with unlimited long distance is only $55 per month in her area. Not only can most areas not get that sort of rate, but even six years ago, service even with limited long distance in the Cleveland, Ohio area was still $80 per month. This is why it is important to research all of the angles before making a decision.
VoIP
As mentioned already, there are a lot of services out there. All of them have satisfied customers for various reasons, so it is still important to consider individual situations before making a choice. However, the VoIP category is also one in which there are varying degrees of quality. In a neighborhood with fiber optic supplying the Internet service, for example, it might be more sensible to switch to VoIP than in an older neighborhood with overhead cable lines.
VoIP obviously requires an Internet connection. The better and faster the Internet service, then the better the quality of calls. Some VoIP providers have a mobile app as well, but they work in different ways. Some will use the mobile data plan, whereas some will actually use the phone’s voice minutes! Also, call quality over a cellular data plan is likely to be poor unless it is a 4G network. It can work in 3G, but it will require a strong and steady signal.
The first place to check out prices is perhaps the local cable carrier. Many of them offer VoIP service in addition to Internet and cable television. Most of the time, they will offer a bundle deal which can not only save money but make paying the bill easier since it is all to one company.
Customers need to be prepared, however, for if an existing customer tries to upgrade to a bundle, they often find themselves pitted against an antiquated bureaucracy that makes no sense. New customers are often eligible for deals whereas existing customers are not, even if the existing customer wants to add services (and thus pay more money in the long run potentially). It is no wonder that USA Today posted in a February 2014 article, “Cable TV customers can’t get no satisfaction,” that cable TV ranks among the worst liked U.S. industries. They are outranked in this category by Internet service providers (ISPs), but, as they point out, these are often the very same companies.
Vonage is one popular VoIP choice that is designed as an easy replacement for a POTS system. They offer both low cost international and domestic plans. One reason that people like it is because customers can use their existing home phones. Another reason is that they are one of the few, and perhaps even the first, to offer enhanced 911 (E911) service, which was designed for VoIP services. They now also offer a mobile app that will work over wifi, 3G or 4G.
Ooma is a service that has made some big waves in the telecom industry. The concept is quite simple: Buy the equipment, plug it in, and receive “free” service for life. In reality, though, the customer still has to pay various taxes and fees which are not the fault of Ooma. Keep in mind, though, such fees and taxes help keep the E911 service going, and Ooma also offers 911 text in areas where it is supported. Ooma offers an iPhone app that can save on mobile minutes. There is also a premier offering, which can give home business owners a second line, that currently runs for only $9.99 per month.
Skype is still the favorite VoIP service, according to NetTop20.com. Unlike Vonage and Oooma, a regular telephone cannot be connected up, as there is no device to purchase to plug them into. For voice communications, all that is needed is a computer running Windows, OS X or Linux and a headset in order to download the software and use it. Like most VoIP providers, same service calls (Skype to Skype in this case) are free. Either credit or a subscription is required to call landlines and mobile numbers. In addition, an “online number” (used to be called “Skype In” number) requires a subscription. However, a United States subscription along with an online number for incoming calls is only about $60.00 per year after discounts (subscriber has to pay for the entire year to get that sort of discount). That’s less than some people pay for a month of landline service! In addition, video calling is available Skype-to-Skype for free if both parties have a webcam, which is ideal for video conferencing. Skype offers a few versions of its mobile app as well, meaning it can run on a wide variety of platforms. Skype does not, however, offer 911 service.
Google Voice/Google+ Hangouts is the cheapest solution of all. It is free, at least if only calling within the United States. Even the online number is free! Video calls can be accomplished through Google+ Hangouts. While this is arguably one of the best deals going, the call quality is not always what it could be. It does have a mobile app, but when that app dials out, it is using the cell phone voice plan, not the data plan. Still, Google Voice may have one of the best voicemail systems going. It can detect some numbers as spam and move them into that folder automatically, or numbers can be blocked. It is also different, for it can be set up to ring more than one device. So, for example, if someone is not in front of their computer to answer a call, the cell phone can be setup to ring in addition to the online app.
A caution about Google Voice is needed, however. Google has a tendency to start up and then stop applications regardless of popularity. Google Reader was killed off in spite of many who used it. This actually isn’t likely with GV, but what is likely is that it will be totally incorporated into Google+ Hangouts at some point. In addition, Google Voice is free “for now.” If, when or how much they might being charging is anyone’s guess at the moment.
Magic Jack is perhaps one of the most versatile of these without breaking the bank, in part because it doesn’t need a computer. It started as a cheap computer alternative to the telephone, much like Skype, but now comes in a small device that can connect to the Internet and a regular phone. They also tout a mobile app for the iPhone and Android that supposedly doesn’t use the mobile voice minutes. Reportedly, people have taken their Magic Jacks with them on vacation and were able to use them by connecting them to the hotel’s Internet service. It isn’t clear if even Ooma could do that.
Magic Jack seems like a wonderful device with a wonderful plan in all honesty. However, this article would not be objective or fair if it weren’t pointed out that Magic Jack has had its share of customer service complaints. Most of them center around billing disputes. A Google search will turn these up.
Cell plans
When an American thinks of cell plans, he or she typically thinks of a two-year contract. However, that is not the norm in Europe and Asia. In countries outside of the US, it is more common to use prepaid plans. The benefit is that these plans do not subsidize a phone even after the contract expires. TracFone is probably the most well known of this type of service offering.
There also is Ting, a service that will only charge you for the amount you actually use it. While it is a tiered-price model, it is still a different concept from that which most companies promote.
Conclusion
Careful research is needed in order to choose the best option(s) for a given situation. Hopefully, this information will make that easier.
So, go forth and save!