Vonage vs. magicJack vs. Skype vs. ooma vs. Cable

Which one is best?

Last update: October 2013.

These days there are lots of alternatives to your pricey local phone service — so many that's it's bewildering trying to figure them all out.  So this article will you sort through your options for the most popular alternatives.  (I'm sorry, I can't cover every single possible company, because there are so many of them.)  And rather than make you read the whole article just to get the punchline, here's a handy summary right up front.  (And by the way, I personally use Vonage.)

The service I'm interested in isn't listed here

Sorry. There are hundreds of VoIP providers and it's impossible for me to cover them all, so I focus on just the most popular three (plus cable). I couldn't fit any more companies into the comparison table besides. So, what you see is what you get.

Requires high-speed Internet

All these options require high-speed Internet, except for the cable option.  So if you don't have high-speed Internet, you either have to get it, or cable phone is your only option.

Despite the fact that the calls go over the net, with most of your choices the experience is the same as with a regular phone.  In fact, you use your same, regular phone, and it sounds and works just like a regular phone.  The only exception is Skype, for which you'd use a headset, or your computer's internal mic and speakers.

Get a U.S. phone number even if you live in another country

So far as I know, all of these services besides cable let you get a U.S. phone number, no matter where in the world you are. That allows you to make and receive U.S. calls on the cheap.

What are the general downsides of these services?

• Power & Internet. If the power goes out or your internet connection goes down, so does your phone (except for a Cable Phone).
• Microsecond Delay. There's a delay of up to a full second between when one party starts speaking and the other side hears them. That might not sound like a lot, but it's enough that you might find that you and the person you're talking to wind up interrupting each other more often by trying to talk at the same time, since you haven't yet noticed that the other person has started to talk too.
• Multiple phones might not ring.  If you plug multiple phones into some of these services, there might not be enough power to make any of the phones ring when you get an incoming call.  Solutions: (1) Make sure your phones have electronic ringers (not the old-school mechanical bell ringers).  and/or... (2) Turn the ringers off on all the phones except for one of them (possibly two).  and/or...  (3) Use cordless phones, which have their own internal power.
  
• Security. In theory, experienced hacker could listen in on calls over the Internet, just like they can do right now with email. If you've never been worried about email being unsecure then you probably won't care much about this. In fact, email is a bit more vulnerable, because once someone gets the data they also have the message, whereas with phone calls once they have the data they'd still have to figure out how to assemble that data into audio they could listen to. Here's an article about VoIP security.

How do I get my phone number switched to my new service?

First of all, if you don't mind changing phone numbers, do so.  It'll be a lot easier and quicker if you accept another number.  You can certainly keep your number if you want but it's a little more involved.  I kept my own number so I know what the process is like.

When I moved my existing phone number to Vonage, I had to download a form, sign it, and return it to Vonage (fax or email) saying that I authorized the transfer.  Vonage isn't able to get your phone number from your current phone company unless you do this.

While you're waiting for my phone number to be switched, Vonage sent me the phone box and a temporary phone number.  I installed it to make sure it works, but of course I kept my old service active so I could receive incoming calls while waiting for the transfer to actually take place.

It took about four weeks for my number to get switched. Vonage sent me an email the day before to let me know it was scheduled to happen the next day. Vonage took care of canceling my old account with your old phone company.

Some companies charge fees to move your phone number to their service.  See the table above for more.

Can I use DSL line instead of a cable modem?

You could, but it probably wouldn't be worth it.  Your DSL service most likely comes with your local phone service, so when you get a new service you wouldn't be able to cancel your DSL phone service, so you wouldn't save any money.  Using a new service with DSL is only a good deal if you're one of those rare people whose phone service isn't coming over the DSL line.

Calling international mobile phones usually costs more

Unlike U.S. mobile phones, in many countries the person making a call to a mobile pays for the call.  For this reason, most of the international calling plans give free calls to landlines only in those countries, not mobiles.  Vonage does have a plan that includes free calls to mobiles even in the affected countries.  If you intend to call foreign mobile numbers a lot, be aware of all this.

The various phone services compared

Vonage

Vonage sends you a little black phone box (for free).  You plug it into your cable modem, then you connect your computer and phone to the phone box.  This is easier to understand with a picture, so I made one.  See the picture at right..

The cheapest plan is $13/mo. which includes 400 minutes to anywhere in the U.S.  But the real value is Vonage World, which gives you unlimited calling to the U.S. and 60 different countries for only $27/mo.   If you have friends or family overseas, this is nothing short of incredible.  However, my calls to Japan sound much better on Skype.

I signed up for Vonage way back in 2004, paying around $15/mo..  I've saved over $3000 from the $45/mo. I was paying to my local phone company before.  It gets better, if you sign up on this special page and enter my phone number (512-322-0638), Vonage will give you the first three months of the $27/mo. plan for only $10/mo.  (Full disclosure, they give me a free month of service when you do that, but dude, I'm totally hooking you up!)

A nice bonus is that it's great for travel.  When I went to Japan I just threw my Vonage box into my suitcase, and then in Japan I had my regular U.S. phone number.  My next-door neighbor in Austin could call me and it would ring on my desk in Japan!  But Vonage is a no-go for hotels that have only WiFi and not a wired connection.  So for travel, Magic Jack is a better option.

Voicemail is stored on a central server, so you can access it from any phone.  You can have voicemails automatically sent to your email, and they also include a text transcription of the message, which isn't always accurate, which I've still found to be exceptionally convenient.  I can read my voicemail without having to dial in to listen to it, and if I do want to listen to it, I can click the button in the email message rather than having to dial in.

Vonage has some serious competition from ooma, but a couple of the features I like cost more with ooma (voicemail-to-email, and international calls).  So for me, Vonage is cheaper.  But if you're not making international calls, ooma will probably save you some money.

Magic Jack Plus

You've seen the commercials for the old MagicJack, so you know how it works:  You plug the little USB adapter into your computer, then plug your phone into the adapter.  It's that simple.  (You can also use your computer's mic/speakers or a headset if you prefer.)

But customers didn't like leaving their computers on all the time (especially as the electricity to do so wiped out the savings from the cheaper phone service).  So in late 2011 they came out with the Magic Jack Plus, which you plug directly into your wired Internet connection (i.e., your router).  So now you can use the Magic Jack Plus with or without a computer, yay!  But if you don't already have a router, you'll have to buy one, otherwise you can't have both your computer and your Magic Jack plugged into your Internet at the same time.

Most users should have Magic Jack plugged into their Internet, not their computer, because of the electricity cost of keeping the computer on 24/7 to receive calls.  If you've got a 150-watt computer system that's on an extra 18 hours a day, then at a sample cost of 15¢ per kilowatt hour, you're gonna spend an extra $150 a year in electricity for the computer.  Bye-bye savings.  Now, if your computer is already on 24/7 anyway, then there's no extra electricity cost, but if so, do you really need to run your computer 24/7 to begin with (and to pay to do so)?

MagicJack costs only $70 and includes a whole year worth of unlimited nationwide calling.  Future years are $30.  But if you want to transfer your existing phone number to Magic Jack, be prepared to pay $20 for the first year and $10 for future years.

MagicJack is the best solution for travel.  Unlike Vonage and Ooma it works on WiFi (when plugged into your laptop), and unlike Skype you can plug it directly into wired Internet when it's available.

And now the downsides:

• Customer Support is chat only.  And it's less than stellar.  Hope that you don't have to contact them.  (Their support website is a joke, too, with woefully incomplete explanations.)
  
• Some users have technical problems where they have to keep reconnecting the Magic Jack to get it to work.
• If you want to keep your existing phone number, you'll pay for that privilege annually...forever. ($20 for the first year, $10 for future years)
• No ability to call 900 numbers or other numbers that are pay-per-call (though you might consider this a plus, not a con).
• Can't call certain rural areas.
• See mixed reviews on Amazon and this page of criticism.

(Visit the MagicJack website.)

Skype

Skype is the only service that needs no hardware.  You just download the software and it runs right on your computer.  If your computer has a built-in microphone and speakers, you can talk and listen through that.  If it doesn't, you can just plug in a cheap headset to your computer.

You can skip the monthly fees and just pay-as-you go, a couple cents per minute for calls.  Or you can go with a cheap monthly plan (up to $9/mo.) which gives you unlimited calling.

All that's for outgoing calls.  If you want to receive calls on a real phone number, that's $5/mo. extra.  Also, Skype is the only service that doesn't let you transfer your existing phone number.  So if you want to receive calls with Skype, you're gonna get a brand-new number.  And while we're at it, Skype is the only service that doesn't handle 911 emergency dialing.  (The workaround is to find your local police department's 7-digit phone number, and add that to your phonebook, for a simple double-click to call.)

Skype requires your computer be on 24/7 to receive calls, and the extra electricity to power your computer can quickly erase your savings.  So Skype isn't a good choice as your primary phone.  But it's great for travel, assuming you travel with a laptop.  If you've got an Internet connection for your laptop, even WiFi, you've got a phone.  Of course, in that regard, Magic Jack is even better, because it works both on your laptop with WiFi *or* plugged into a wired connection, if one is available.

I prefer Skype over Vonage for occasional calls to Japan, since the quality is much better with Skype.  (Visit the Skype website.)

ooma

ooma is a lot like Vonage:  they send you a special phone box, which you plug into your Internet connection, and then you plug your phone into the box.  The main difference is their pricing model.  With Vonage you pay nothing up front and just pay the small monhly fee.  With Ooma you pay $127 for the box, and then all your calls are free.  So ooma costs a little more to get started, but it has the potential to be a lot cheaper in the long run.

ooma offers a monthly plan for $10/mo. which includes some extra features.  But even with this extra plan, ooma is still often cheaper than Vonage even after just a year.

To make international calls with ooma, you have to buy a $10/mo. plan.  You don't have the ability to just make international calls at a low per-minute rate on the fly like you can with Vonage.  So note that with the $10/mo. for the extra features, and $10/mo. for international calling, suddenly ooma's $20/mo. isn't much less than Vonage World for $27/mo.  And with Vonage there's no equipment to buy.

That's why I haven't switched to ooma.  I make international calls, and I want my voicemail files sent to my email.  That's cheap or included with Vonage (depending on the plan), but these features would cost me $20/mo. with ooma.  Even after five years, a Vonage World plan is still competitive with ooma plus the extras.  So with a long payback time for ooma, I'll stick with Vonage.  The price isn't bad, I'm happy with the service, and I don't want to hassle with porting my phone number to a new service.

Choosing between Vonage and ooma can be hard, so hopefully this table will make the decision easier:

	Vonage			ooma
	US & Canada 400 (400 mins/mo.)	US & Canada 800 (800 mins/mo.)	Vonage World (unlimited)	no plan (unlimited)	w/Premier Plan (unlimited)
Initial cost	none			$120
Monthly cost	$13/mo.	$22/mo.	$27/mo.	none (~$3.50 in taxes/fees)	$10/mo.
Total for 1 year	$156	$264	$324	$127	$247
Total for 3 years	$468	$792	$972	$127	$487
Total for 5 years	$780	$1320	$1620	$127	$727
International calls	Cheap per-minute rates		Free to over 60 countries	$10/mo. for 1000 minutes/mo., or cheap per-minute rates
Cost for at least 1000 mins/mo. of international calls (estimate):
Total for 1 year	$756	$864	$324	$247	$367
Total for 3 years	$2268	$2652	$972	$487	$847
Total for 5 years	$3780	$4320	$1620	$727	$1327
Other features
Calls to Canada	Free			1.4¢/min.	Free
Keep existing phone #	Free			$40 extra	Free
Voicemail (accessible from any phone or web browser), Caller ID, Call Waiting, 911 dialing	Included
3-way calling (conference call)	Yes			-	Yes
Voicemail to email (audio)	Yes			-	Yes
Voicemail to text	Yes			-	Yes
Call Forwarding	Yes			-	Yes
Ring multiple phones simultaneously (e.g., a call to your main number also rings your cell)	Yes			-	Yes
Call Screening   (hear who it is before you pick up)	-			-	Yes

Does not include taxes.

Cable ("Digital Phone")

Cable TV companies like Time Warner and Comcast are now offering local phone service.  The problem is that it's not really much cheaper than what your regular phone company offers.  Oh sure, there's a great introductory rate, but how much does it go up to after the promo expires?  That's not a rhetorical question, because they don't tell you how much you'll be paying once the special rate is over.  Not in their come-on junk mail, and not on their websites where they want you to sign up.  They actually expect you to sign up for their service without telling you the normal monthly rate!  That's just sleazy and rude.  For this reason alone, I would never get cable phone service.  (Even if it were cheaper, which it's not.)

Even more choices

There are lots more companies offering discount Internet-based phone service than just the ones covered in this article, but I cover only the most popular ones because (1) Even more companies won't fit in the comparison table, (2) As a one-man show I don't have the resources to cover every company on the planet, (3) What's listed above is plenty to choose from.  I'm sorry if I didn't cover some more obscure service that you either use or wanted to know about (as so many of you have let me know), but what you see is what you get.

For those interested in checking out any more of the literally hundreds of other VOIP providers, you could have a look at VoIP Review, VoIP Info, Which VoIP, or My VoIP Provider.

(back to top)