Vonage and other similar VoIP providers sell a relatively inexpensive (sometimes free) box that connects your telephone to your high speed internet connection, and then charge a monthly service fee of around $25 for unlimited domestic calls. This is similar to the mobile phone plans that most of us have, where the cost of the mobile phone is subsidized by the mobile phone providers via the service contracts.
ooma's premise is that instead of charging for monthly service, they earn money by:
- selling the ooma device up-front, which costs quite a bit more than devices from other providers, though the device looks like it's well-designed and well-built;
- encouraging their subscribers to sign up for their Premier service, which includes some extra features for $12.95 per month. I think we'll be fine using their basic service, which includes all the telephone features we use today; and
- charging for international calls, for which their rates are similar to those of other providers.
There's a 30-day money-back return guarantee, so we'll see how this trial period goes. If it continues to be good, we'll be cancelling our local phone service in a few weeks. I'll post an update when that decision is made.