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Internet phone service may finally connect with callers

Vonage In Print News

Simple enough

Internet phone service may finally connect with callers

April 17, 2003

By Vikas Bajaj

Never mind that the Vonage Internet-based phone service offers unlimited domestic long-distance, low international calling rates and a host of innovative features.

The most impressive thing about this one-of-a-kind system is its simplicity.

From the moment you open the box and connect a special Ethernet converter to your broadband Internet connection, there are few complications. I had a dial tone within minutes. After testing the service for several weeks, during which I made numerous phone calls around the country and overseas, I hit only minor snags.

The Vonage system's ease of use is notable because it's so rare for a telecom gadget. From cellular phones to Internet connections, new products and services too often are buggy and nettlesome.

But the convenience comes at a price.

Vonage Holding Corp. charges $39.99 a month, plus a one-time $29.99 activation fee for unlimited calls anywhere in the United States and Canada. The company also has a $25.99 plan that includes 500 minutes of long-distance calls and charges 3.9 cents a minute thereafter.

Because Vonage sends calls over the Internet instead of the traditional local-phone network, subscribers must have a cable modem or a digital subscriber line, which costs $35 to $53 a month.

You'll also need a router so that multiple devices share the cable or DSL connection. A router costs as little as $45. Many homes with two or more personal computers already have a router setup.

Cisco Systems Inc. makes the little black converter that Vonage sends customers at no charge for subscribing to the service. It plugs right into the router.

Up to two standard telephones can be plugged into the converter, which translates phone signals into data that can be sent over the Net. I plugged a cordless phone into the converter so I could use the service all over my house.

For the most part, the service worked well. Voice quality on most calls was as good as on the regular phone network.

Cellphone comparisons

But the more relevant comparison might be the cellular phone, which many people use to make many, if not most, of their long-distance calls. Wireless phone companies generally don't charge extra for long-distance service and often provide unlimited calling on nights and weekends.

Vonage has two key advantages over mobile phones: The voice quality is superior, and calls aren't dropped at random because of the vagaries of wireless technology. Also, most cellphone companies don't offer discounted international calling plans. Placing a foreign call on a wireless phone can cost several times more than on a land line.

Low international rates

Vonage's international rates beat even traditional prices. Vonage charges 6 cents a minute for calls to the United Kingdom and 5 cents to London, while the best rate from AT&T Corp. is 9 cents. Vonage's highest rate for calls to Mexico is 12 cents a minute; calls to Mexico City and Guadalajara are as low as 6 cents. MCI, by comparison, charges 19 cents for most calls to Mexico and 10 cents to border cities.

I did have a few complaints with Vonage's international service. It took close to 30 seconds sometimes for the phone to ring on the other end when I called Thailand and India. Friends and family sometimes complained my voice was choppy, but other calls to India, Thailand and Hong Kong were flawless.

A Vonage spokesman said the problems may have to do with the local-phone networks in those countries. Even if that's the case, I typically haven't had such troubles when I've used international service from AT&T or MCI.

Another factor: Vonage is not meant to be used as a primary phone line. It won't work during power blackouts or when your broadband connection isn't working properly. So you may want to keep a basic local-phone line active.

You may want your mobile phone, too. You can pack along the Vonage converter to a hotel or office, but it requires a wired connection, so it's less portable.

On the flip side, Vonage's service comes with features that are either unavailable from local-phone companies or cost a lot more.


Not only can you have phone calls forwarded from your Vonage line, you can manage the process via the company's Web site. Local-phone company SBC Communications Inc. offers call forwarding as well, but you have to configure it from an automated phone system that's harder to use.

Subscribers can also take Vonage service with them when they travel or move. The Cisco converter can be plugged into any high-speed Internet connection around the world. It'll still ring your phone number and let you make unlimited calls to U.S. or Canadian numbers.

Now that's cool.

Pros and cons

The question that consumers must answer is whether these features and the low international rates justify Vonage's cost.

You can already get unlimited local- and long-distance from MCI's Neighborhood for $50 without broadband. SBC is selling an unlimited long-distance package for $20 a month, although you have to sign up for certain add-on features such as Caller ID and voice mail.

Even though calls on Vonage sound better and stay connected longer than wireless calls, most people probably wouldn't want to ditch their mobile phones.

To me, Vonage makes the most sense for a professional who works at home, makes a lot of long-distance and international calls, travels a lot and wants to give out only one phone number.

For such people, the Vonage service would be $40 a month well spent.

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†AK and HI residents pay $29.95 shipping. ††Limited time offer. Valid for residents of the United States (&DC), 18 years or older, who open new accounts. Offer good while supplies last and only on new account activations. One kit per account/household. Offer cannot be combined with any other discounts, promotions or plans and is not applicable to past purchases. Good while supplies last. Allow up to 2 weeks for shipping. Other restrictions may apply.

1Unlimited calling and other services for all residential plans are based on normal residential, personal, non-commercial use. A combination of factors is used to determine abnormal use, including but not limited to: the number of unique numbers called, calls forwarded, minutes used and other factors. Subject to our Reasonable Use Policy and Terms of Service.

2Shipping and activation fees waived with 1-year agreement. An Early Termination Fee (with periodic pro-rated reductions) applies if service is terminated before the end of the first 12 months. Additional restrictions may apply. See Terms of Service for details.

HIGH SPEED INTERNET REQUIRED. †VALID FOR NEW LINES ONLY. RATES EXCLUDE INTERNET SERVICE, SURCHARGES, FEES AND TAXES. DEVICE MAY BE REFURBISHED. If you subscribe to plans with monthly minutes allotments, all call minutes placed from both from your home and registered ExtensionsTM phones will count toward your monthly minutes allotment. ExtensionsTM calls made from mobiles use airtime and may incur surcharges, depending on your mobile plan. Alarms, TTY and other systems may not be compatible. Vonage 911 service operates differently than traditional 911. See for details.

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