I’ve been a Vonage customer since March 7th 2006 and I’ve got to say, it was one of the best moves I’ve made.  My initial outlay was ~$100.  The Linksys router cost $99.99 and had a $50.00 rebate.  I had to pay $29.99 to activate my account and $14.95 shipping.  When I first started, I was paying $27.97 per month.  Since then, it has slowing increased to about ~$33.oo per month.

I’ve had a few complaints, mostly the system has not really evolved.  I.E. my first complaint and still is true today is no outbound caller ID (Name).  When I call someone, they get my number but not my name.  The other big complaint is that the call waiting feature does not always work.  I.E. sometimes people get a busy signal and I have no clue that I missed a call.

I started looking at Ooma last spring/summer.  They were in beta for the Telo product so I wanted to wait and see how it rolled out.  I also wanted to wait for CES to see what else might be on the horizon.  I just purchased the Telo and I’m waiting for it to arrive.  Right now, Costco has the best deal.  They are selling the Telo for $229.99.  What’s so good is that they give you $100 for international calling and instead of a 60 day trial of Ooma Premier, it’s 6 months.  Now once you buy the Telo, it costs you around $12.oo per year.  The first year is included in the cost of the Telo.  This charge is called regulatory recovery and other costs.  What do you get for $12 per year?  A phone line with basic voicemail.

So how do they make money?  They are banking on most customers buying the Premier service for $9.99 per month.  This gives you a second line, voicemail notification via e-mail and SMS, voicemail forwarding via e-mail, the ability to transfer a call to voicemail right in the middle of the call, do not disturb, 3 way conference, blacklist, community blacklist, anonymous call block, call forwarding, multi-ring, custom ring patterns, and call screening.

For me, these are great features and I’m excited to have them.  Just having a second line for $9.99 is a deal.  Add the other features.  Just think, even if both lines are busy, the calls will ALWAYS go to voicemail.  No more busy signals

From a financial point, I’m banking on the company being in business for at least one year for me to break even.  I.E.

Vonage = $33 * 12 = $396.00

Ooma Year 1 = $246.98 (Telo cost + shipping + tax) + $59.94 (6 Months of Premier) = $306.92 (Savings $89.08)

Ooma Year 2+ = $12 + $119.88 = $131.88 (Savings $246.98)