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Product Review: Vonage DigitalVoice

August 21, 2002

By Cosimo Leipold

If you make long distance calls and are sick of sending the phone company big checks, consider signing up for Vonage's Voip service.

In the last few years, technology has transformed almost every household item; practically every product someone owns has made leaps and bounds. Televisions now come in plasma models, AC units are extensively programmable, microwaves come with voice reminder features. Yes, everything has changed dramatically, with one exception: my phone.

Until now. A company called Vonage has begun to provide the home user with easy access to voice over IP (VoIP) technology, at ridiculously low rates. And they offered to let me try out the service.

I received my package from Vonage, which contained a Cisco voice over IP router, a small binder with my phone number and some instructions and a 900MHz cordless phone. The phone was a courtesy; they do not typically include it in the package. The package had arrived late in the afternoon, and I did not expect to have everything working that day. My computer is behind a Netscreen 5 firewall that goes through an older HP hub with its own security features and a separate wireless network to boot. I figured I'd plug in the router and have to figure out what ports to punch into my firewall.

But when I read the instructions, it said I should pick up the handset, push a button on the router and dial #80. When I completed this, the router read back an internal IP. Next I tried to make a call, which went through beautifully. Somewhat amazed, I tried calling it from another phone, and that worked cleanly as well. So much for my firewall, I guess.

Nevertheless, the point is this: setup is easy and the system works out of the box. For the next few weeks, I simply used the phone whenever I had to make a long distance call or whenever I had it handy. In so doing, I found one annoying drawback, but it was easily fixed.

When sitting on the couch or at a desk, how many people are willing to go get the cordless phone that's connected to Vonage in order to call a friend, instead of simply picking up the phone next that's right next to them? It may sound like a case of terrible laziness, but after a while, it does become annoying. So what do you do?

You buy one of the base-station phones such as the latest Sony or Siemens models. You plug the primary phone (a non-cordless base station) into a wall--in this case, the Vonage router--and pick up a few cordless phones. The cordless phones communicate with the base station and do not require their own phone jacks. With this configuration, any phone in the house can communicate through Vonage.

With my particular base-station phone model (Sony QuadraStation 2.4), however, you cannot pick up one of the cordless phones while the base handset is picked up. Therefore, you cannot have someone in the house join a call, nor can you those " Whazzup" television commercials. This lack does not bother me too much, but if you go this route, you may want to check into that before you buy a whole phone system.

For the most part, the on-line interface is great. Being able to see incoming and outgoing call activity at any moment is a nice feature. Real-time on-line billing is a big plus--no more sudden surprises when the bill arrives by mail.

But this is not to say that the on-line system doesn't need a little work. Specifically, the voice-mail interface is sub-par compared to the rest of the site, and the UI for that section seems less refined than for others. I've also had some problems accessing it without turning down my IE security settings, which I don't like to do. You also cannot download your voice-mail; it streams. However, you can have up to 45 messages in your voice-mail, and each message can be up to five minutes in length, so there's plenty of space.

That being said, the drawbacks I mention are mostly trivial. When it comes to sound quality and general ease of use, the Vonage is hard to beat. Simply pick up the phone and dial, just like any other phone. In fact, most people cannot tell the difference between a regular land-line and this phone. It doesn't works perfectly all the time, though. For instance, if I happened to be downloading something and using all my bandwidth, the sound sometimes would distort or there would be long pauses or echoes.

For the record, I have a 1.5/768K DSL line. Vonage says the minimum speed required is 90kbps, so it should work fine on slower lines. And it did work fine on a slower 384/128 line. The system also comes with the usual phone system feature set, including voice-mail, caller ID, call waiting, call forwarding, In addition, you can pick any area code you want, provided they have it, for your phone number. As of this writing, they have a limited selection of available area codes in New York, New Jersey, California and Massachusetts. They will be adding several large cities in 2002, including Chicago.

So is the Vonage system worth the $19.99 (500 minute package) or $39.99 (unlimited) a month? It depends on your calling pattern. In my case, I looked up my last five monthly long distance bills: $72, $68, $51, $228 and $169 for a total of $558 in long distance charges over five months. In each case, I spent more on long distance than Vonage would have cost me, particularly during the months where I called Europe. My most recent phone bill just arrived, and it does a wonderful job of illustrating how much money Vonage can save you--my long distance bill was $25. In fact, 10 of those 25 dollars were for a five minute phone call to Italy, at three in the morning. With Vonage my calls to Europe have thus far totalled 124 minutes, nearly twenty five times the minutes in the $10 call, for almost the same price: $11.16. In other words, the long-distance minutes I've logged with Vonage for $11.16 would have cost me $248 if they'd been on my regular long distance service. If that isn't impressive, I don't know what is.

Of course, you've probably noticed that I pay $2.00 a minute for calls to Italy (trust me, it shocked me as much as you). I'm guessing this is because I don't use long distance too often, and I haven't signed up for any special service plans. So in an effort to try to compare Vonage's rates to rates probably closer to what the average person receives, I contacted a close friend who makes a significant amount of calls to Europe and Africa and has shopped around for rates with various carriers. Pouring through his latest bill--a $400 monster--I sat down and meticulously calculated what each call cost and what it could have cost on Vonage. Roughly speaking, about 1,000 minutes of calls were made at a rate of 32 cents a minute, and roughly 150 minutes were made at a rate of 64 cents a minute. If made through Vonage, these rates would have been 9 cents and 18 cents a minute, respectively. Plugging through the math, all of his calls could have cost about $120 if he'd made them through Vonage--a savings of almost $300. You can probably guess his reaction when I showed him my math. Yes, he's now a Vonage customer.

In detail, the international calling rates are a flat fee, regardless of the time of day you place a call, meaning you don't have to worry about "night rates", "evening rates" or "peak times". At 9 cents a minute to Italy (and 5 cents a minute to certain parts of Italy), it's a steal. A full list of long distance prices is available on their web site. In most cases, the savings are substantial. It should also be noted that you can call practically anywhere with Vonage, they don't cover only certain cities. You can call Afghanistan, Zimbabwe and everything in-between.

I also found another interesting use for Vonage: tote it with you to Europe. Although you may have a tough time finding somewhere to hook it up, it will work. And anyone who has ever visited or lived in Europe knows that international calls are much more expensive there than they are in the US. So I suggest you take your Vonage along with you and stay in a hotel with Internet access. Vonage's international rates are going to be lower than the hotel's, but the real advantage comes when you call the US. These calls are completely and entirely free, because, as far as Vonage is concerned, it is a US to US call--your actual physical location does not matter.

Along these lines, note that if you happen to have two Vonage units (i.e., multiple family members), calls from one phone to the other are free. These calls also do not deduct from your monthly minute allocation.

I cannot recommend this product enough. Although the system is only as reliable as your ISP's line, the savings are quite substantial and more than offset the occasional hiccup. I signed up. My parents signed up. My friends signed up. None of us have any complaints.

Cosimo Leipold is an analyst for DiamondCluster International in Chicago. He spends his free time skiing, scuba diving and trying to take as much vacation as possible.

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