New VOIP Services

I had a chance to compare two new Internet phone services from Ooma and MagicJack. Let me summarize what I have learned in the table below:

	MagicJack.com	Ooma.com	Vonage.com V-Phone	Skype.com
Initial cost	$40 for first year	$400	$40	$96/yr
Recurring cost	$20/yr following years	None	plus monthly Vonage service
911 features	Uses E911 PSAP	Uses landline 911 (2)	Use Vonage PSAP	None
Headset or analog phone?	Either supported	Analog Phone	Neither needed (mic included)	Headset + PC
Free calling area	North America	USA	North America	Various countries (1)
Mac OS X support	Not yet	Uses phones	Not yet	Yes
Notable features	Headset or phone	Second line	Built in mic	International reach
Drawbacks	Few area codes yet avail.	Customer support	Tied to Vonage account	Dicey p2p network issues
Email voicemail notifications?	Yes	No	Yes	Yes
(1) Skype pro provides unlimited calling in a single country that you receive the phone number for.
(2) Please note that in order for the ooma system to work, we will add call forward busy ("CFB") when we provision your line, for which you will owe your landline phone company associated monthly charges

So what are these new services? Ooma is a small box about the size of an answering machine that hooks up to both your broadband Ethernet and your land voice line. MagicJack is a bit bigger than a USB key drive that connects to your computer's USB port. They have very different approaches, and are not for everyone.

MagicJack is a way to supplement your existing landline or cellular service. If you have a loved one that is living overseas, or someone who travels a lot, then this makes sense. At a fixed price of $40 and $20 for the second and subsequent years, it is a low enough price point that you can send it to someone living abroad, have them register with a US phone number, and then you can have cheap unlimited talk time. The nice thing about the gizmo is that you can either hook up a standard analog phone to it, or use whatever PC-connected sound device you'd like: it can toggle between both. It doesn't yet have many local phone numbers -- when I tried it out, I could get as close as Memphis but nothing in Missouri as yet. But this is becoming less of an issue as many people have unlimited long distance plans anyway.

Ooma is much more expensive, and I am not sure where their market is: at $400, you have to make a lot of calls and the device requires a lot more commitment. You need to make changes to your landline calling features too. Its niftiest feature is the ability to give you a second outgoing phone line, so you can get around a chatty teen who is always tying up your phone. But it has very poor customer support despite some initial buzz and a high initial cost to get their gear.

Both Ooma and MagicJack come with their own voicemail box that can send you email notifications, which is becoming standard in the VOIP world. Both supply unlimited calling in the US or North America, with additional per-minute charges to places beyond. Both support the better E911 services that aren't the norm with most VOIP suppliers: ironically, Vonage offers a competitive USB gizmo called the V-phone, but 1) you need to sign up for a Vonage service plan to use it and 2) it doesn't support E911, instead, emergency calls get routed to a Vonage operator.

The other entry in this sweepstakes is Skype. They of course only work on your PC, but they do offer Macintosh support, something neither the V-phone or the MagicJack presently have. They are a bit more expensive if you buy all the various options (you need Skype In to get a fixed phone number so people can call your PC at $60/year and Skype Pro to make outgoing calls at $36/year ) than either USB device, but they do offer local numbers in various countries, should that be important to you or if both of your frequently called parties are outside the US. Their Pro plan allows unlimited outbound calling to phones in whatever country you assign your phone number to your account.

What you pick will depend on a lot of different circumstances: if you are looking for a complete replacement of your landline phone with an Internet solution, I still think either Vonage or AT&T CallVantage is a better way to go than any of these products. If you make a lot of international calls to different places, then probably Skype is your answer. If your teen or traveling salesperson is tying up your phone or racking up cell minutes, then any one of these might be a lower-cost alternative if you want to keep your existing landline.

Clearly, the VOIP market is undergoing a lot of change, and a lot of players will come and (like SunRocket) go. As someone who uses Vonage daily for the past four years, I am watching avidly what is going on.