-advertisement -

Home > Savings >

It's your call

Sean Belshaw switched to VoIP -- a technology that makes calls via the Internet -- to save money on his phone bill.

"There are no hidden fees and the fees are much lower than traditional phone companies," says Belshaw, who is a technical services manager in Toronto.

If you're one of the many Canadians considering ditching your home phone in favour of a cell phone due to the high costs, you might want to consider VoIP.

The basics
VoIP, which stands for Voice Over Internet Protocol, routes your call over the Internet, says Nelson Hudes, public relations representative for netTALK, a company that provides VoIP services. "That's what allows it to be less expensive: the data goes over the Internet."

In 2009, there were 161,000 VoIP phone lines in Canada, which is the latest estimate from the Canadian Radio-television and Telecommunications Commission (CRTC). Today, it's estimated the numbers are much higher as more people armed with cellphone look for ways to cut back on home-phone costs.

Belshaw, who uses a Sipura SPA2100 VoIP Box, pays $25/year for his phone number (which includes call waiting, call display and call answer) and $25/year for unlimited calls within the Toronto area.

In addition, there's the cost of the one-time initial purchase of the VoIP device. Prices vary but a popular option is the netTALK Duo WiFi -- which connects using WiFi – with a suggested retail price of $74.95.

The benefits
In the six to eight years that he's been using VoIP, Belshaw says he's saved hundreds if not thousands of dollars. "The cost is my favourite reason for switching but I have been impressed with the clarity and ease of use to set it up."

Another benefit is the lack of monthly charges, adds Hudes. "Since you don't have a monthly cost, your monthly phone bills are gone."

The drawbacks
"Perhaps one in a thousand calls does not go through and I need to redial," says Belshaw. "But that minor irritation could be anything and if it's the VoIP's fault, it's well worth the money I have saved."

But according to the CRTC, the type of VoIP service you have will determine the type of 911 service available to callers. With "nomadic" VoIP service -- which is provided over the Internet and lets callers access telephone services using any high-speed Internet connection from any location -- the mobility of this service makes it very hard for both service providers and 911 operators to pinpoint the location of a call.

"I have set mine to work by giving my home address," says Belshaw. "But since I can be anywhere (for work), if I was to call 911 from my laptop, they would dispatch to my place in Toronto."

In March, the CRTC announced that local VoIP service providers and resellers must follow 911 regulations or risk being shut down. For example, it is now mandatory to inform consumers about any limitations of 911 service from VoIP home phones during power outages.

There's no doubt, the appeal of VoIP is in the savings. However, as with any product, do your research and weigh the pros and cons.

Vanessa Santilli is a freelance writer based in Toronto

-- Posted June 10, 2013
See Also
Estate planning abroad
Women's investment clubs
Rent, don't buy
More savings stories
Overnight Averages* +/-
Variable open mtg 3.73%
48 month new car loan 8.38%
1 yr redeemable GIC 0.65%
Compare rates in your province
Auto loans
Chequing accounts
Credit cards
Home equity loans
Personal loans
Savings Accounts
What Bankrate Readers
are reading
Credit and Debt
top of page
- advertisement -