Tuesday, April 27, 2010

Cut the cord with (almost) free phone service


I consider my home phone one of life's necessities. Some of us can live with only a cell phone (and this is a great way to start cutting your bills). However cell phone call quality is noticeably worse than regular phones in my area (plus you always have to worry about managing your minutes). In addition, I like to have a backup to my cell phone in case of a 911 emergency.

A few years ago I broke away from the old phone company and started trying out voice-over-IP solutions. I've used Vonage with good results (except when I tried to cancel my service...). Vonage had good call quality and so-so pricing (about $30 per month after all of the fees are added in). So when my local cable company offered me a "triple-play" package (phone, internet, TV) with attractive pricing I took it.

As you'd expect, the triple-play pricing was simply a teaser rate which expired after a year. I've played the usual games of threatening to cancel, but despite my best efforts the bills seemed to keep going up. So, I started looking for alternative solutions.

  1. Must provide reliable, acceptable quality phone service
  2. Must work with the 911 service
  3. Must be a stand-alone device (no computer required)
  4. Must have unlimited local and long distance calling in the US
There are some really compelling alternative phone services that are quite popular (like Skype and Magicjack). However, these require me to use my computer and I am not a big fan of running my desktop 7x24 for just this purpose. I do love Skype and use it for all of my (infrequent) international calling needs.

I finally read about and thought I'd try the Ooma Telo:

You pay a one-time up-front cost for a phone box and have no monthly bill (except for taxes/fees). There is always a catch!  Taxes and fees include 911 fees, state taxes, etc.  There is an online web calculator here.  Apparently, your actual fees could be lower (depending upon when your product was made).  See this discussion here.  For me, the calculator says I should pay $3.47 per month, but according to my account, I will only be charged $11.75 per year (starting with the second year).  Either way this amounts to (almost) free phone service.

If you want to keep you old phone number, there is a one-time charge of $40. OOMA does offer a premium package that includes a second line and one free phone transfer. The premium service is not free, and I didn't opt for it since I only wanted/needed the basic features (which are more than adequate for me).

UPDATE:  Tip from anonymous below:  If you are lucky enough to find an older "Hub/Scout" combo (called the "Core") from a local retailer (or Amazon) and it doesn't have any printing about "fees" on the box.  It may truly be free of yearly fees.  Not sure how long this may last though...

Just take the cost of the box (which you own) + $40 to transfer your number and divide it by your old phone bill (minus taxes/fees).  In a manner of months this system will pay for itself.

I ordered the box from Amazon (cheaper than buying directly from OOMA) and it was on my doorstep two days later.

So, how well does it work?

In short, no different than my old phone. I did notice some audio glitches that I can't say for sure were OOMA's fault (I'm used to far worse on my cell phone!)  However, the problems were minor and haven't happened again. I can only assume that the OOMA engineers are working hard at making it a good service.

Hooking up the box was simple. You only need three cables (included): power, phone line, and internet.  Just put it near your router/modem and within cable distance from any phone jack in your house (unless you opt for a cordless handset below).

Obviously you need reliable broadband internet service (in my case, cable modem). Registering the box was easy and it started working immediately. Transferring my old phone number took less than 3 weeks (they estimated a month). You get a temporary phone number assigned right way so it is fully usable while you wait for your number to transfer. OOMA even called me a few times to make sure the transfer worked as expected (decent customer service!)  Afterwards, I called my cable company and canceled my old phone service.  I really enjoyed that call!  No more phone bill, yeah!

Using the OOMA telo

There is a web interface that you can use to control the service and even listen to your voicemail. Even better, the box itself acts just like your old answering machine (although you don't have to use it that way). The top mounted buttons have a nice blue backlight and respond to your touch.

You can use the OOMA Telo with your existing phones (corded or cordless) with no problems (since it can plug into your house phone wiring). OOMA does offer a cordless phone Ooma Telo DECT 6.0 Cordless Handset that connects wirelessly to the OOMA Telo, but I haven't used it since I already have a multi-unit cordless phone.  I am tempted to try one of these phones as it eliminates one more box in my house.

Final thoughts

Although the service is free, the skeptic in me says that it might not stay free forever. I expect the Government to hit them with fees that they may have to pass on to me eventually.

Update:  You still need to pay for taxes / fees (see corrected discussion above)

OOMA might not be in business forever (although they seemed to be a very well funded company).  Even so, after a few months, this little box has paid for itself and each additional month is "money in the bank!"

Highly recommended and I sure don't miss those phone bills.  Go OOMA, you rock!


  1. Why OOMA Telo vs. OOMA Hub? I can't figure out the difference.

  2. Neither could I at first. They don't make it easy do they?

    The Telo seems to integrate the Hub/Scout into one box. Unless you need the separate boxes, I'd go with the Telo.

    Also, the Telo is their latest product and I'd assume most likely to have support and updates in the future.

  3. If you buy the Ooma Core, which includes the Hub and Scout, you won't have to pay any taxes/fees. I feel the core is the better deal, even though it has their first generation internals. I plugged in a wireless VTech Dect 6.0 phone into the Hub and have several handsets in my house.

  4. This fee business is a bit confusing so I called OOMA sales and had a nice long chat with a very friendly sales person. Here is what I found out:

    Hub/Scouts are no longer being made, but you can still find them in stores.

    Early Hub/Scouts had no fee associated with them, but there aren't many of these left on store shelves. Best bet is to try Radio Shack or some smaller retailer. Look for boxes that say nothing about fees on the side.

    Later Hub/Scouts (and very early Telos) had an $11.75 yearly fee associated with them. Again, this should be marked on the box.

    The latest Telos and Hub/Scouts both have a $3.47 monthly fee. There aren't that many Hub/Scouts that have this fee as the product was discontinued, but they are out there. Again, check the box.

    So, it all boils down what the box says, not actually the product itself.

    Happy hunting!

  5. True it does boil down to what the box says concerning the fees. I bought my new Oome Core at Amazon and my Ooma has no fees. It appears Amazon has plenty of them like this and I am considering buying another one from them.

  6. Can you use Ooma fitf fax machine?

  7. I've not tried it, but apparently you can. See OOMA's support article here:


  8. I also purchased the Ooma telo with very high hopes. It appears that Ooma is an excellent solution if you don't have AT & T DSL service :-(

    When you call AT & T, they let you know that they cannot unbundle your phone, long distance and DSL line. You have to order and install a completely new DSL line. This DSL line by itself is more expensive than my current phone bill, not to mention having to pay an install cost.

    Well heck, if I am going to install a new line, I thought I would upgrade to Comcast. But Comcast has pretty much the same thing as far as stand alone internet. The costs for an unbundled internet are more than my current phone/dsl.

    Seems like unfair competition is afoot!

  9. Hi Jamie,

    Don't give up hope! Sadly, you are pretty much forced to go with non-DSL Internet in my area as well if you want OOMA as your only phone. Using OOMA as a second line is no problem (for those that care).

    Note that while Comcast's basic Internet service is more expensive than low-end DSL, the speeds are far greater (for me anyway). For $42 I get 21 MBbit down and 4 MBit up. My DSL friends can't touch those speeds.

    I figure Cable Internet is worth the extra cost as I stream video quite a bit these days (and in HD) since I cut the cord. We have multiple users in our family as well and that adds to our Internet bandwidth usage.

    I totally agree with your main point, it is anti-competitive! This is why we have to fight back whenever and wherever we can!

  10. This is really fantastic advice, thank you so much


Copyright (c) 2010 CuttingTheBills.com. All Rights Reserved.