Understanding VoIP

Most people have had a home telephone (or landline) as far back as they can remember. It typically comes from your broadband provider. As technology evolves, the number of people using cellphones and other devices to communicate has grown. Home phone services have become pricey, especially considering that so many people don't really use them anymore. It's no surprise that many people have gotten rid of their landlines. To many, having a landline only duplicates a service they already pay for with their cellphone subscriptions.

But, there are reasons to keep a landline. For example, you'll have the same number for years, and people come to know that number. Landline phones are typically more comfortable to hold, especially on longer calls. If you frequently call someone outside the U.S., landlines can be cheaper than cellphones. Sometimes, cellphone service can be spotty and batteries expire more quickly.

There are distinct advantages to cellphones as well. You can make and receive calls from just about anywhere, and it's convenient to have a phone with you when you're out and about, especially in case of an emergency.

Introducing VoIP

Big phone companies are being challenged as new technology reduces the need for the traditional phone lines. One of the methods quickly replacing traditional phones is called VoIP. If you've ever used Skype, or seen the commercials for Vonage or MagicJack, you've already been introduced to VoIP.

VoIP is an acronym for Voice over Internet Protocol, or Voice over IP. VoIP converts analog audio signals into digital data so it can be transmitted across the Internet. Basically, you're making a phone call over the Internet instead of using traditional phone lines, thus bypassing the phone companies entirely.

Because you are placing the call over the Web, you must have high-speed Internet (that is, faster than dial-up) to use the service. No specific phone is necessary for using a VoIP service. VoIP service providers typically supply their customers with telephone adapters. The telephone adapter plugs directly into the customer's cable or DSL modem. Then, you use your phone the same way you always have.

Advantages include:

• Price -- Depending on your service provider, most equipment is free or costs a reasonable one-time fee. Monthly rates are usually between $15 and $25.
• Inexpensive international calling -- VoIP providers smash cell providers and traditional phone companies when it comes to international prices. Most VoIP providers offer free calls to Mexico and Canada. Some offer free calls to European countries as well.
• Features -- With phone companies, you're typically charged for voicemail, caller ID, call waiting, and long distance calls, plus taxes, fees and convenience charges. With most VoIP services, these are all included at no additional cost.
• Mobility -- You can take your VoIP phone on the road and plug it in at hotels, friends' homes, or virtually any place with a broadband connection. Simply plug your telephone adapter into the existing broadband connection and use your phone to place and receive calls. This eliminates the need for call forwarding and can help you save money when traveling outside the country.

Disadvantages include:

• Additional equipment -- Most devices are free, but they require installation. Depending on how tech-savvy you are, it will take some time and know-how to set up the telephone adapter with your home network, router and modem.
• Call quality -- Difference in sound quality can be detected when using a VoIP phone. Sometimes the connection isn't as strong as a traditional phone line. Users might experience occasional drops in sound quality, including a stuttering or choppy sound. Typically, these issues are temporary and may be related to heavy network traffic.
• Loss of service -- While most landline phones still work when there is a power outage, VoIP needs a power supply to function. It also needs Internet, so if the Internet goes out, so does the phone service.

It's important to understand the prices and features of VoIP services, so you can choose what best fits your needs. Top VoIP service providers include Google Voice, Vonage, MagicJack, Skype, and Ooma.

VoIP has forever changed the way we communicate with each other, and it's giving the big phone companies a run for their money! Check out some of these service providers to learn how you can get started with this cost-cutting technology.

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