Ooma might be onto something here. The VoIP provider is taking a different path with the Telo system: the phone calls are free. Like, you don’t ever have to pay for calling your Mom. You can either use your own phones or the Ooma high-end DECT 6.0 handset. Sounds nice, eh? Too bad there’s a huge admission price for the hardware.
The Ooma Telo base station costs $249. That gets you the unlimited calling, caller ID, a new phone number, and access to online call logs. If you want to port your existing number, that costs another $40. The Ooma handset is another $50 too. But wait, there’s more.
Ooma is banking that at least some buyers will opt for the $10 per month Ooma Premier Service that adds on a few extra features. You get one-touch access to voicemail, call screening, remote access to messages, 3-way calling, free 2nd number, backup number, personal blacklist, call forwarding. The Telo comes with a three month trial of the Premier Service, btw.
But when you start to look at the numbers, it makes sense. Vonage is about the only direct competitor to the Ooma anymore (MagicJack doesn’t count, sorry) and it’s least expensive unlimited plan is $25. Let’s say you port your number to Ooma for $40, but don’t buy the branded handset. You only owe Ooma $290 total, where you’re out $25 every month to Vonage and so it only takes you 12 months to recoup your costs with Ooma. Sure, the Vonage system does have more premium features included and now lets you call more than 60 countries with for no additional charge, but there is a one-year agreement that covers the free hardware.
The high price might turn some off to Ooma Telo at first, but my goodness, the numbers don’t lie. It makes sense. The base station should be available at all major electronic outlets now (or real soon) with the handset launching in November.
EXPLAIN why magicJack doesn’t count.
Also, explain OOMA’s questionable financial history. Certainly banking on a company that has burned through so much cash and senior management should be worrisome for the consumer.
Im going to have to mirror this sentiment. Why doesn’t magic jack count? Was reading a article about them and they have nearly 40x the installed base of ooma
Magicjack doesn’t count because, unlike mot of th e others it: (1) requires you to hook it up to your always-on computer (2) forced application which has ads (3) doesn’t allow you to use your own telephone (4) has by far the worst customer support of any telco/voip provider.
As to #3 you can you your own phone. it just plugs in to the magicjack unit via standard telephone cord.
We need an edit option. it should read “you can use your own phone”.
You you you’d you you yous you you you yous yoyyou you you. You you, damn you you need you edit you you you button you. Help
MagicJack sucks big time. I bought it a year back and never used it… it was $40 waste.. It just annoys me when the magicjack window pops up everytime you make a call or receive a call..
One of my uncle bought one and it never worked, he got it replaced but again the same issue…
MagicJack sucks. I tried it and sent it back for a refund within 48 hours.
I like the fact that this in indeed a price INCREASE for ooma, where voicemail USED to be free with the regular base purchase. I can only hope that legacy customers don’t experience some sort of now super premium premium if the move to premier. Or, if they make any changes they get hit with a T&C change.
I’ll just comment here while we wait for the author.
I think magicjack doesn’t count or apply here, since we are talking about stand alone voip solutions, and which offer regular features that a POTS customer might expect, like voicemail, second line calling, etc. Magicjack only works with a dedicated computer RUNNING all the time to enable it to work. Don’t get me wrong, it has a GREAT application and price point, but I wouldn’t ever use it for my home line/s
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I’m not knockin Ooma but I have been a haapy MJ user for 8 month’s now. It’s running on and laptop and the call quality is good. If Ooma goes under your stuck with an expensive brick. They have only survived on venture capital so far and until I see some positive financial statements from Ooma I’ll stick with MJ for now. For the up front cost of Ooma I would think Voipo would be a better bet. Their feature rich and use standard voip equipment. If they ever went out of business you can still use the ata with another provider.
I find it funny that when you google Ooma and click on the “How Do We Make Money” link under their site results, it gives you a page not found error.
In all seriousness though I would be really tempted by this (in combination with Google Voice in place of the premium features) but am concerned about long term viability of the company.
Yes, I had the same fear. If the assumptions on the business model are off (gross margin $ on hardware, freemium service upgrade percent, call usage, lifetime of a customer) they are toast.
However they just go a load of new funding. I’ve had Ooma 8 months, and it’s now paid off vs. say Vonage.
The only thing I’m afraid of, is if they go under, trying to get my number back.
Vonage the only VoIP player? I guess my ViaTalk account, which I paid $200 for 2 years of service (at a cost of about $10/mo after all is said and done) that gives me all the premium services that Ooma offers doesn’t register on the radar? I guess if you don’t care about any of those extras, the Ooma looks like a good deal, but there are plenty of VoIP options out there that match it and are a bit more, IMO, “known players” in the market. BTW, does Ooma give me the SIP credentials so I can use a soft phone on my laptop in lieu of the ATA? ViaTalk does…
I believe the “How Do We Make Money” link is a cached page on Google’s server. Ooma just recently redesigned their webiste. So, the link on Google is outdated.
I figured as much but I still found it funny. I did go to the website but didn’t see an equivalent page. Of course I didn’t look that closely either. It might still be nested in there somewhere.
Here’s your link: http://www.ooma.com/company/our-business-model
So, you only have to pay $10/month for a “free” second number? Isn’t free defined as that you DON’t pay for it?
Like my momma use to say “Son, nothing in life is free!”
I’m surprised nobody has brought up Skype yet – they have plans ranging from $3 unlimited US and up, and you can get hardware that does not require a computer, such as the Belkin or Ipevo desktop or WiFi phones starting at around $80.
http://www.amazon.com/Belkin-F1PP010EN-SK-Desktop-Internet-Phone/dp/B00158UZTW/ref=pd_cp_e_3
Skype is a gone case.. I would not want to tie up to a proprietary stuff..
Gone case. LOL.
In France all calls to all countries are free if you go through your ISP. This is included in all 30€ / month plans. This does not include calls to mobiles phones, but you need no additionnal fees or special hardware. You can call Chile for ZERO cents for hours with the cheapest phone ever.
Actually, since mobile phone and land line are not differentiated in the US, you can call any number in the US for free and for as long as you want (and, like Serge said, you can call for free the landlines of more than 30 countries…)
So in the end, it’s cheaper to call the US from France than to call from LA to OC! Weird :/
Have you guys tried
Sipgate.com is cheaper.
why are we ignoring lingo?
Few points,
1) You can get many of thee features for less money using other commercially available DECT SIP hardware, such as the Siemens Gigaset A580ip and S675ip that are now shipping in the US. But the Ooma may be more convenient in terms of a user friendly bundled service with all the options, than trying to find your own SIP Provider.
2) Is it hard to design a cordless phone that stands up by itself on a desk, for using the speakerphone?
Google Voice + Gizmo solution is free if you want to jump some hoops.
Who guarantees the service stays free?
I love my Ooma. I’ve had it for 5 months and it has paid for itself (I got the earlier gen at $189). The performance is flawless, features good, and the best feature of all is enabling you to say “eff you” to the phone companies.
I agree with the concern about long term viability but I’m happy to enjoy the ride until then!
I would rather prefer $50 adapter and Gizmo5 setup instead of paying $290 upfront. Gizmo5 and GV gives you free what Ooma is giving you for $290.
If Oomla lets you make free calls to 60 countries, then I would jump and buy it right away..
I think vonage is the best compared to OOMA b’coz of the free call to 60 countries. This saves a lot of bucks.
For what it’s worth; I bought the Ooma Hub and Scout after reading Mike Arrington’s positive review of it last February. With the exception of porting my number (pain in the rear), Ooma is a great service, good customer support and I haven’t regretted paying $219 from Amazon, plus the $99 for premium service. I’m rooting for them.
We’ve been using Ooma for a year now without any problems. We were spending about $100 a month with Verizon, so Ooma paid for itself in 2 1/2 months. They are also working on integrating Google Voice, which is nice. The best thing about the service is you can block telemarketers (or anyone).
If you pay by the month for home phone service, you’re giving money for nothing. A phone conversation is roughly the bandwidth equivalent of an email attachment, and telcos are simply banking on the long-established consumer belief that phone calls cost money.
Ooma’s a massive money saver, I’ve had one for a couple of years and the only thing different from normal phone operation is the stupid music dial tone.
64kbps each way (G711) counts to 480Kb/minute (60 seconds * 8000bytes/s) each way.
G729 is little less, but still 10min conversation gives you nice bandwidth amount. How often do you send email attachments?
P.S. Think before posting, pleaaase!
I send multiple-megabyte attachments every day, like countless thousands of people who are also charged nothing extra for doing so.
Based on your numbers, even if one spent hours a day, every day, on the phone, completely filling a consistent 64kbps pipe at both ends (very unlikely), you’d still only use a few gigs of bandwidth a month. Most ISPs won’t complain if you use that much every *day.* And even cellphones offer a 5GB monthly limit.
P.S. Post before thinking again, pleeeeease!
If MJ doesn’t count what about these guys:
https://www.tk6000.com/
Seems cheaper than Ooma.
Not bad, but if there are questions regarding Ooma staying in business, I’d have even more concern about this company staying in business.
Ooma recently started charging the “free” service $11.79/year because of phone taxes and 911 service. If these guys are offering 911 (and it looks like they do), how’re they getting around the mandatory taxes?
I use Teleblend VOIP for $15.95 a month, and get all the features of Vonage, except the newly introduced “free calls to 60 countries”. I think there are other strong VOIP competitors to Vonage.
It sounds like I need to buy the $10/month service to get voicemail plus the $290 upfront costs. That is almost 20 months to recoup costs before you start saving over Vonage.
I wouldn’t risk almost a two year break even cycle on Ooma.
that sounds very interesting indeed.
Ya, now that voice mail is only available as a paid service kills it for me.
You could drop the payments to $49.99/year or $4.99/mo by buying the voicemail only. That would reduce your break even time a few months.
I have been using OOMA for 10 months now w/o any issue……..great call quality!!
Vonage does not compare to OOMA in pricing….if you need to call international only then Vonage is better, otherwise its expensive.
Ooma is in Costco (with a slight markdown), among other places, so they are definitely moving some units in the retail distribution world.
While a sip box-google voice-gizmo5 rig is good enough for me, it’s a bit cumbersome compared to something plug and play like this. Why the hate?
When will it be available in Australia?
Another happy ooma customer here. Bought the box 6 months ago for $200, and I’m already ahead compared to what I paid ATT and a long distance company.
Did pay $40 for porting the number.
It works really well. Plug your phone into the ooma, connect to the internet and you’re done.
It’s a great deal, and I’m glad to see them coming with new devices and new plans. Looks like they’re going to be around for a while, and by if/when they go under, it’ll probably be a sign for me that it’s time to say goodbye to my landline number.
Ok, MagicJack isn’t a competitor. But what about sipgate.com? i’ve been using their service since they started in the US. No setup fee, no minimum charges. it offers all the features i need (3-way calling, call recording, parallel calling, call forwarding, super-low rates, voicemail, fax) plus I’m not bound to some hardware. Switching from Vonage to sipgate cut my phone bill from $30 a month down to $5 a month. Now that’s competition for Vonage and Ooma.
I’ve had Ooma for about 9 months now, it’s great. Once they received the port form, it was done within a few days. Tech support doesn’t talk down to the semi-savy like other companies. Vonage bold-face lied to me, telling me they could give me a local Palm Springs, CA phone number. I had an elderly friend that got a $100 phone bill for dialing my so-called local phone number. Once your with Vonage, you can only disconnect by talking to a hard-to-reach person that sugars you with freebies to keep you enrolled long enough that you will be out of their free trial period. (It was worse than disconnecting from AOL). I run my Ooma below recommended speeds on a DSL line and since I live alone and don’t usually surf and talk on the phone at the same time, the quality is quite acceptable. I’m more than willing to pay Ooma the $99/yr premium fee.
I had ooma since January 2009. Paid $200. on sale at BB. It has already paid for itself. I stayed with the Basic Service which has free voicemail. The voicemail is accessible thru the ooma lounge. You do not need the Premiere service to have voicemail. I don’t make international calls, so that is a non-issue for me. So far I am satisfied with the ooma service. I was also happy with Vonage but $0 versus $32. is a no brainer.
With the new Telo hardware, voicemail is not included free anymore :(
Older hardware still has the free voicemail, but once the current stock runs out, you may no longer be able to get free voicemail.
I recently bought the Telo, but if I knew the T&C were changing, I’dve bought the older hub months ago.
I’m in the market for an alternative to Comcast’s expensive phone service ($30/month with free US calls).
Naturally I’m looking at Ooma although, like others here, I flinch on the high upfront cost which will take a couple of years to amortize over Comcast and that’s without including the premium $10/month service.
I also use Skype for all my international calls and already have a Skype ready phone. Their Skypein (internet phone number) with free US calls is only $72/year, although that’s a fairly bare service without all the conveniences of Ooma.
I just looked at Gizmo5 which seems to offer even less convenience than Skype and MagicJack isn’t an option if I have to keep my pc always on.
This will be my primary home phone, plugged into Comcast’s higher bandwidth cable.
Any feedback on the better option is appreciated, thanks.
Go to all the vendors who sell Ooma (fry’s, best buy, macrocenter, Costco, staples. . . .) and read the review, you will see a uniformly 99% rating for the product.
If you think it will take you a year to brake even then get the Ooma from Costco, I think they have a two year return policy.
You just have to try it. I was really surprised that I have discovered Ooma so late.
I don’t use my pone a lot, when I do it’s just to call some relatives in other states or friends locally. So Ooma was a perfect solution for me. I got my Ooma about six months ago. I used to spend $65 for phone (no ID, no call waiting) + DSL (AT&T).
I got my Ooma from Amazon for $175 and got cable internet for $20 a month. I am now saving money and enjoying a faster internet speed. The quality on ooma is amazing!!! No more telemarketer phone calls (because I am not listed).
I also hooked it up to my alarm system and battery backup and everything works great. If you have considered trying Ooma, do it, it’s free for 30 days, you have nothing to loose!!! By this time next year I would have saved $780. I only whish I would have purchased Ooma in 2006, I could have saved $2340!!!!!!
Vonage is not a bad idea, but I can not think of the last time I had to suddenly call 60 counties and talk to them for hours. For $35/month I can use calling cards or even Ooma’s prepaid international calls.
For does of you who are skeptics like me, give it a try, you will not regret it.
Free Voice Mail for All Ooma Users
http://www.ooma.com/blog/2009/10/21/free-voice-mail-for-all-ooma-users/
What about this combo?????
MagicJack ($40) + Older Netbook ($200).
Power comsumption is roughly the same as an Ooma hub (probably less if you include the Scouts).
I experimented w/ MJ, and it will drive my house phone wiring with 1 or 2 wireless base stations.
If you go with the additional 5yr plan for $60, then total investment is approx $300 for 6yrs of unlimited USA/Canada calls –> ~$4/month (and you get an extra PC to boot!).
Most people are going cell phone for everything now and just dropping the landline or using as a backup or for extended length calls.
There are literally dozens of VoIP service providers…with as many $ plans and customer service levels. Just depends on what the consumer’s needs are.