receives compensation from some of the companies listed on this page. Advertising Disclosure


VoIP Phone Service: Is It Free? editorial staff editorial staff

Some VoIP services are free. Download the software and you can be up and running, making free calls to other service users, and even, in some cases, placing domestic calls to landline phones and cell phones without charge.

Two of the more popular VoIP servicesGoogle Voice and Skype—are available to anyone with a computer and an Internet connection, with no initial setup costs or service fees. Domestic calls to any phone number on Google are free, with a charge for international calls. Skype calls to other Skype users are free regardless of location, with charges to landline and mobile phones. Skype also incorporates file transfer and video-conferencing capabilities, which are also available through Google+ “hangouts” and through a Gmail plug-in.

Facebook recently incorporated a VoIP feature into its Facebook Messenger app for the iPhone and iPod Touch in the U.S. and Canada. The app lets Facebook users call one another for free over a Wi-Fi connection or the phone’s data connection.

While long-distance calls typically incur a per-minute fee, it is usually less expensive than POTS. For basic VoIP services, these are charged on a per-call basis, either from an established credit fund or a debit or credit card. There are also some plans as low as $5 a month for a limited number of international-calling minutes (e.g., 500 per month) and unlimited nationwide calling. Unlimited worldwide calling plans start at around $20 per month. Some companies offer trial periods of one to three months at a lower promotional price.

VoIP services that include some kind of hardware—either handsets or phone adaptors—or which are aimed at business users, start with a monthly service fee. Some companies offer trial periods of one to three months at a lower introductory promotional price, after which they rise to the regular rate, typically about $30 a month, although it could be higher with more feature-rich plans.

By the way, if you run a small business, maybe fewer than 10 employees, you might think that a residential plan could work just fine and, in principle, it would. However, read the terms of service before you buy. Most consumer plans forbid use of the service for commercial purposes.

Choosing a Vendor

There are many VoIP features, price plans and services to choose from. In general, you’ll want to take these five factors into consideration:

  1. What is the service plan? The range of services offered does, of course, determine how much you’ll pay for a monthly plan. Look for plans with unlimited calling minutes, including connections to desired international locations. Do you want to keep your existing phone number, and is there a charge to do so? What other options do you need? Most providers can offer toll-free numbers, fax service, and the ability to add lines. The question becomes: which has the package that offers everything you need at the most affordable price—and without cancellation fees?
  2. What calling features are available? You should be able to acquire everything you can get on a regular phone: call hold, voicemail, caller ID, call waiting, call forwarding, conference calling, etc. Also, check out which 911 and directory assistance services are offered. What kind of special features do you want? Multiple voicemail boxes, visual voicemail (your voice messages converted into text messages or email), mobile apps, music on hold? Don’t assume if you’re a small business that some features are luxuries. These features not only enhance productivity, but they equal the playing field. The beauty of VoIP is that small businesses can now afford the features/functionalities once only attainable by large companies.
  3. Is the system easy to use and install? It should be. But make sure that the company has a reputation for ease of installation, as well as readily understandable operating instructions. There are multiple consumer rating sites online; check out the evaluations for multiple VoIP providers. Ask about training videos; you can find videos on YouTube that will teach you in minutes how to do amazing things with your VoIP system!
  4. Will your VoIP provider help you? Most VoIP systems are easy to manage through computer dashboards. But no type of technology is flawless. Does the VoIP provider offer customer support via email or telephone? And is there a fee for using customer support? Maybe if you have a good IT staff, support isn’t going to matter much. But if you don’t, you probably won’t want to spend a lot of time reading the documentation to figure things out for yourself. Many phone systems host active forums where other users post answers to questions and provide solutions to common problems.
  5. Hosted or self-hosted? In most cases, you’ll want the VoIP provider to host the software. For hosted systems, you access the software that controls your phones through the Internet. But if you’ve got a savvy IT team and a VoIP provider with a strong reputation for providing technical support, a self-hosted option could save considerable money over the long run. But it requires some upfront expenses, including a private branch exchange (PBX), and a gateway to convert from analog signals to digital distribution.

VoIP Terms

  • Bandwidth: The amount of data a connection can transmit or receive. The higher the bandwidth, the faster the connection.
  • Digital Subscriber Line (DSL) or Digital Subscriber Loop: DSL is used to deliver digital Internet connections over conventional analog phone lines.
  • Ethernet: The digital networking system used in the majority of computer-to-computer connections.
  • Foreign Exchange Line: A phone connected to a network outside of the telephone company’s local exchange.
  • Local Exchange: Telephone services provided within a provider’s authorized territory.
  • Packets: Units of data. When your voice or other data is transmitted over the Internet, it’s divided into blocks of information, or packets, that are reassembled at the receiving end.
  • Public Switched Telephone Network (PSTN): Another term for POTS (Plain Old Telephone Service), the copper wire network that carries analog voice signals.
  • Session Initiation Protocol (SIP): A communications standard used to send and control voice and video calls over the Internet.
  • Softphone: VoIP service that is software-based—i.e., which uses the computer as the telephone.
  • Virtual Number: A telephone number not directly associated with a landline telephone. The advantage is that a company or person located in a different area code, or even a different country, can appear to be located in an area code or country without having to pay for a foreign exchange line (a line outside of the local exchange).
  • Visual Voicemail: This voice-recognition software turns any voicemails you receive into text messages and sends them to you via email or text. It eliminates the need to make a call to retrieve your messages.
Image Credit: Monkeybusinessimages / Getty Images editorial staff editorial staff Member
The purpose of our community is to connect small business owners with experienced industry experts who can address their questions, offer direction, and share best practices.