Best VoIP Services

Cable VoIP takes the lead

Although Vonage is the best-known VoIP provider, sometimes called the grandfather of VoIP, it's been losing market share to cable companies. Now Internet services are dominated by cable providers, and digital voice service can be run over the same wires. Thus cable companies can offer attractive bundles of TV, Internet and phone service.

Without these bundled rates and other special promotions, cable VoIP (*Est. $40 per month) is usually the most expensive option. A full-featured, Internet-based VoIP service such as Vonage (*Est. $25 per month) can save money. In addition to lower basic rates, Vonage includes features like voicemail that usually cost extra with cable VoIP.

However, cable phone services consistently get better reviews than Internet-based VoIP providers -- both for reliability and call quality. Cable providers say this is because they can route phone calls over their own broadband networks rather than public connections. Another advantage is that professional technicians install cable VoIP. And cable VoIP often has battery backup built in -- important for 911 calls when the electricity is out.

Four cable VoIP providers earn recommendations in at least two different reviews: Bright House Networks, Cablevision/Optimum Voice, Comcast and Cox Communications. Time Warner Digital Phone also gets high scores for reliability in the latest Keynote Systems tests. However, users say that a company that provides excellent service in one part of the country may rate much lower in another area. It's a good idea to check with neighbors and take a look at user-written reviews of your local cable company before signing on.

Comcast earns excellent scores in Keynote Systems' audio quality tests, far outperforming an AT&T landline phone system. A March 2009 review in PCWorld.com also recommends Comcast. However, Comcast ranks near the bottom in another comparison review, outranked by Cox, Bright House and Cablevision. Nor does Comcast earn any of the top spots in the 2008 J.D. Power and Associates survey of 13,600 telephone customers.

No one company earns top ranking for all areas of the country in this latest J.D Power survey. In the West, for six years in a row users have given top marks to Cox Communications (*Est. $15 to $55 per month). Bright House Networks earns top ranking in the South, while in the North Central region, Wow! Cable is the winner. It should be noted that although Time Warner cable doesn't earn the top spot in any region, it ranks second in the East -- following the top choice, Cablevision (Optimum Voice). Optimum Voice also earns a Readers' Choice award in PCMag.com's service and reliability survey.

Obviously, your choice is limited by where you live and which cable companies are available to you. But in general, cable VoIP is best for call quality.

VoIP reviews recommend Vonage, Phone Power! and Ooma

The best-established VoIP provider, Vonage (*Est. $25 per month), has accumulated more recommendations in reviews than any of its challengers. However, as noted earlier, its market share has been eroded by cable VoIP. Vonage doesn't lack Internet-based challengers, either. Of these, Phone Power! and Ooma earn the most recommendations in reviews.

All three VoIP services offer "unlimited" plans that turn out to have usage caps. According to a May 2009 article at PCWorld.com, both Vonage and Phone Power! cap their "unlimited" plans at 5,000 minutes per month -- about 83 hours. Ooma's cap is 3,000 minutes (50 hours).

Phone Power! (*Est. $20 per month) earns a Gold award at DSLReports.com, based on accumulated user-written reviews and ratings. Users also give it high marks and the editors of CallRatings.com name it the best value. Phone Power! offers a month-by-month plan without a contract (*Est. $20 per month), while Vonage requires a two-year contract. Phone Power! can cost even less with a one-year contract (*Est. $17 per month) or two-year contract (*Est. $15 per month). Even with a contract you get a 30-day trial period (but if you cancel, have to return the hardware and pay for that month -- as with all VoIP plans).

The Phone Power! adapter has two jacks, so you can set it up for a virtual or cloned second line, enabling two users to make calls at the same time. The plans include voicemail and standard features like call waiting and caller ID. Calls to the U.S. and Canada are included. Long-distance rates are quite competitive. For example, calls to the U.K. average 1 cent per minute; calls to Mexico, 2 cents per minute. (Calls to cell phones overseas cost more.)

If you make a lot of calls to Europe, however, Vonage may be a better deal. The $25 monthly Premium plan includes calls to landline phones in Italy, France, Spain, U.K. and Ireland (as well as Canada and within the United States). As add-ons, Vonage also offers five different unlimited international plans (*Est. $31 to $40 per month) that cover various parts of the world. For example, the Enhanced World plan (*Est. $40 per month) covers 60 countries.

Another Vonage advantage is its unlimited virtual phone numbers. This means you can add a phone number with an area code that's local to the people who call you most. Phone Power! lets you choose an area code for this purpose, but it becomes your main number. Vonage lets you add as many of these virtual phone numbers as you like. In addition, Vonage maintains a network of local access numbers someone can use to make calls to you without incurring a long-distance charge.

Overall, reviewers say Vonage is the most full-featured VoIP provider, with many free and add-on features. For example, you can adjust the bandwidth to use Vonage with a slower broadband connection. You can add a fax line for an additional $10 per month, plus a $10 activation fee.

Stepping up from the Premium plan to the Pro (*Est. $35 per month) adds software-based VoIP service to your computer, plus 25 free voicemail-to-text messages per month sent to your email account or cell phone. Vonage offers a more basic 500-minute plan (*Est. $18 per month) that includes calls within the U.S. and Canada, but this plan entails an activation fee (*Est. $30). Note that as with all VoIP plans, monthly fees and taxes will be added; a calculator on the Vonage site shows a range of about $6 to $9 per month for these.

We did find some complaints about Vonage. The 2007 comparison review at Wired magazine finds problems accessing voicemail. At WhichVoIP.com, 63 percent of the over 200 users reviewing Vonage say they wouldn't recommend it to a friend. Some complain of poor call quality and dropped calls, others of unhelpful technical support. The trial period is 30 days, and it's not free; you still pay for that month. If you cancel after the trial ends, this incurs a $40 fee.

A relatively new service called Ooma gets good reviews and charges no activation, cancellation or monthly fees at all for basic VoIP. Instead, Ooma charges only for the initial hardware. Once you've bought the Ooma Core VoIP phone system (*Est. $215), the actual VoIP service is free forever for calls within the United States. Calls to landline phones abroad are priced competitively at about 1 to 2 cents per minute. The system comes with one converter box for an extension, called a Scout. For each additional extension, you need another Scout (*Est. $70). You can even use Ooma over a wireless 3G network -- on your laptop or Internet-enabled cell phone -- if it has a really good connection.

The risk is, of course, that the investment in the Ooma system will be lost because the company will close down, as several VoIP providers have done in the past. It takes only about seven months, however, for Ooma to pay for itself compared with Vonage. After that, every free month is a net gain. (The equation changes if you have lots of phone jacks in your house, since Vonage works with up to four, but Ooma can only work with two phones out of the box.)

A review at FierceVoIP.com notes that Ooma is at least breaking even on every new customer, despite its free service. About 25 percent of Ooma customers opt for the Premier plan (*Est. $13 per month or $100 per year) for its extra features -- most of which are standard with Phone Power! and Vonage. For example, to get the "cloned second line" that comes with Phone Power!, an Ooma user has to opt for the Premier plan. The plan also adds three-way calling, voicemail forwarding and several other features. Transferring your existing phone number -- free with other VoIP providers -- is a $40 option with Ooma.

Still, the free Ooma plan includes basic features like voicemail, caller ID and call waiting. Even without the Premier plan, you get email notifications of new voicemail messages. In fact, the March 2009 review at SpotCoolStuff.com calls the Ooma voicemail "fantastic," noting that "you can go onto the Ooma website and hear your messages, organize them into folders and even send them as email attachments." The reviewer also finds the system very easy to set up. However, he finds technical support by phone inaccessible.

Of over 400 users reviewing Ooma at Amazon.com, fewer than 13 percent are dissatisfied with it. The overall average rating is 4.5 on a five-point scale. Comparing Ooma with Vonage for The New York Times in April 2008, Eric Taub reports that "Both systems worked flawlessly after the first installation attempt. And both provide excellent voice quality."

Between Vonage and Ooma, the better choice may depend on something as simple as how often you call Canada and the U.K. (included with Vonage, extra with Ooma), the number of phone jacks in your house, or how much you value support by telephone. Another catch is that Ooma is scheduled to release an improved model called Telo this year. If it makes a significant improvement in voice quality, this might make the current Ooma hardware seem obsolete.