Skype vs. Vonage

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by bledsoe on July 31, 2009

We used Vonage as our home phone service for about 3 years, and for the most part were pretty pleased.  I initially decided to try Vonage because they offered a phone line with unlimited local and long distance calling for about half what I was paying my previous phone provider, BellSouth ($30/mo vs. $50-60/mo).  While the initial setup took a little work, and transferring my existing phone number to Vonage was a bit of a hassle, the price was definitely better and Vonage had a lot of neat features included at no extra charge (voicemail, caller ID, online account access, etc.).

A few months ago, however, we dropped Vonage and switched our home phone service to Skype.  (Check out this post for the basics you need to know to understand Skype.)  The primary reason I switched was the price ($5.50/mo for Skype vs. $30/mo for Vonage), and up until a few days ago, when my Skype phone died, I was relatively pleased.  Using  Skype as your home phone service may not be for everyone, however, so here are a few things to keep in mind based on my experience:

1. Unless you want to use your computer and headset to make all of your phone calls, you need a special Skype phone. I've been using a GE 28310 that I bought used but a few days ago it suddenly stopped working.  The tech support for the GE 28310 is remarkably bad (as I noted in my Amazon review) and after suggesting that I unplug and re-plug everything (which I'd already done), they simply recommended that I purchase another one.  I don't think so.

2. In order to receive calls from regular phones, you have to purchase a Skype phone number. As I noted in my earlier post:

Technically, [a Skype phone number] costs $60 a year, but they give you a 50% discount if you also purchase a “subscription,” which costs $3 a month and allows you to make unlimited local and long distance calls to any phone number in the US.  Without a subscription, you have to purchase Skype credit, and pay a few cents a minute for every outgoing call you make (incoming calls are free).

If you're planning to use Skype as your home phone service, I'd definitely recommend the subscription service, which also includes free voicemail.  If you use the subscription service, your total yearly cost for your phone service is approximately $66 ($30 for the phone number, and $36 for unlimited "minutes"), or roughly $5.50 per month.  Compared to Vonage's $30/month (that's roughly what it comes out to be when you add in the extra monthly Vonage fees), that's quite a savings.

3. Overall, the sound quality I've experienced using Skype has been good, but it seems to vary depending on exactly what type of call I'm on.  Sound quality on every Skype-to-Skype call I've ever made has been fantastic.  When I'm talking to a regular phone using my Skype phone, the sound quality is good, but there's sometimes a slight delay.  And when I'm talking to a regular phone on my computer headset, I notice an occasional dropping of words (like, 2-3 seconds worth), either from my end or theirs.  I'm not sure if this has something to do with the headset I'm using (a Logitech) or what, but I never noticed it when using the Skype phone.

4. Like Vonage, Skype is a VOIP service. This means that it's completely dependent on your high-speed internet connection.  If your internet connection is slow, noisy, or prone to frequent outages, your Skype service (or any other VOIP service) will be as well.  We have cable broadband thru Time-Warner Cable, and while the price is maybe a little steep, I have no complaints about the service, and we've have almost no outages.

Since my wife and I both have cell phones, and since my primary communications medium, even for work (I work from home) has become email, I've found that we use our home phone less and less.  We could probably ditch it altogether and just use cell phones, but so far a VOIP solution has been cheaper.

There have been numerous stories in the news lately speculating that eBay, which owns Skype, is planning to sell it, maybe sometime in 2010, and recently there's been news about eBay (which owns Skype) having legal problems with the people who apparently still own Skype's underlying technology, none of which gives me a real warm feeling about Skype's future.

There are other VOIP providers, including HostGator, which recently began offering VOIP service at an annual plan introductory rate of $8.25/month (which works out to $11.25/month with fees) thru a company called VOIPo.  HostGator has provided my web hosting services for a while, and I've been absolutely amazed at their technical support; it's hands-down the best I've ever experienced, from anyone.  So after my GE Skype phone quit on me, I called VOIPo to sign up for their service.  I'll write about my experience with them in a future post.

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