If you are really looking for the best deals in residential VOIP services, look at providers with annual subscription rates. Most VOIP providers only offer monthly plans. Vonage for example is currently offering $24.99 per month for its basic unlimited service (free unlimited calling to anywhere in NA and Europe).

But as a way to reward and attract customers, VOIP companies are adopting what cell phone companies have been doing for years: offering the latest and greatest gear for free in return for long term committment. 

SunRocket markets a similar package at $24.95 per month or an annual subscription at $199 per year. That works out to about $17 a month. So if you can handle prepaying for your service by the year instead of by the month, then an annual package is a good idea.

Packet8 has also recently adopted the annual package deal. For a flat rate of $199 per year, you get get unlimited calling within North Americal, calling features like voicemail and call waiting and a 100% discount on a Packet-8 enabled UIP1868P 5.8-GHz digital cordless phone system, which can be extended to work with multiple cordless handsets.

From: www.quickstartvoip.com

Free Internet phone service lets you to make free long distance calls over the Internet in three different flavors. The first enables you to make calls from one phone to another as long as both are connected to broadband lines. The second allows you to make calls from one computer to another and the third makes calls possible from a computer to a traditional phone.

But, there are limitations to free services. Let’s take a look.

Phone-to-phone service providers require that you purchase their telephone adaptor (or ATA). As long as you are calling other people who have purchased the same equipment, the call is free. PhoneGnome is one such service. The PhoneGnome adaptor costs about $119. You literally plug it in to your broadband connection and to your regular phone, it configures itself, and you are good to go. You can start calling other PhoneGnome users anywhere for free. You don’t have to switch phone numbers or change telephone companies. Vonage, Packet8, AT&T CallVantage, and others you may have heard of follow the same model.

PC-to-PC service providers allow users to make free calls from one PC to another. Both parties need a PC with an Internet connection and some software easily downloaded from the Net. However, for a call to ring through, both parties have to be online at the same time and have the same, or at least compatible, software. By adding voicemail to a PC-to-PC service though, callers can leave messages even when you’re not online. Unfortunately, voicemail may or may not be free.  Skype, Gizmo Project, and FWD are three typical PC-to-PC services.

PC-to-phone services let you to call a regular phone numbers for free. However, you may be restricted to the locations that you can call or the length of the call. VoipBuster, for example, provides free calls from your PC to landline phones in about 30 countries. The restrictions are a little bit complex, but free is free…Lucky for us, the bigger software-based phone companies are trying hard to entice users so there’s also a current wave of promotions trumpeting free calls to landline phones. Skype for example offers free calls to any phone within North America until the end of the year. Gizmo offers free calls to phones in 60 countries as long as both parties maintain an active Gizmo Project account.

In all of these cases, free Internet telephone services make money by selling credits for calling minutes to landline phones or mobiles, long distance destinations, or phone numbers not on the same VOIP service. Rates are low, however, and you can expect to save significantly over traditional long distance companies. For regular phone users to call you on your free Internet phone account, you must “buy” or subscribe to a conventional phone number. Most services allow you to buy a phone number in different locations, so if your family is in the UK and wants to phone you regularly, you can buy a local UK number that they can call for free or inexpensively.

In an article this week on TMCnet, the research firm TeleGeography reported that US subscribers using VOIP services rose 18 percent in the last quarter to 18.2 million with Vonage being the largest provider with 1.95 million subscribers. Why are they still the biggest?  Massive media campaigns on the web, TV, radio, and sporting events helps…a lot. And don’t forget the catchy jingle and celebrity endorsements. But all that stuff just gets the consumer to the web site (retail sales excluded). What happens after that?

Of course once the consumer turns into a subscriber, keeping them is a whole other story. This blog, as well as many others, has touched on what appears to be widespread customer service problems. In fact, I still get responses to a post back in September on the runaround I received when I wanted to cancel my Vonage service. And my story wasn’t even one of the crazier ones. (Check out Tom Keating.)

Since cancelling Vonage in August, I’ve been keeping busy blogging about the a wave of emerging voice over Internet services. I haven’t applied for any other national broadband phone service, like Primus or Shaw Digital Phone, in my area. I’m happy trying various softphones and of course my PhoneGnome.

But, I decided to take a fresh look at the Vonage web site and see if they are doing anything differently. In my opinion, for all their faults once they’ve got you, Vonage does a lot that’s right.

1) Clear description of services/plans above the fold, with enough text to explain what the plan is all about without clicking 

2) Site navigation is SIMPLE: tabs to products, services, availability and features are clearly identified

3) Upfront explanation of device bundles, including what’s free, what’s extra, and information to help figure out which device is right for me 

4) Special promotions, deals, and other creatives are below the bread and butter products. This is important (I think). To me this says that our products are the most important thing we have to offer, not the limited time sweet deal.

Packet8, Lingo or SunRocket just don’t communicate as well. These three providers all had the basic residential and business plan info above the fold, but I found it took more clicks and more reading to find the additional information I needed. Comcast Digital Voice was the most annoying. Perhaps because they are basically an entertainment company, they feel they have to “entertain” me while selling phone service. A whole bunch of flash nonsense. Stupid. And they won’t tell me anything about their products/services until I tell them my address and zip code.

I guess my point, to make a long story even longer, is for emerging products and services to learn a few lessons here. Speak clearly to your audience. Communicate your product and services upfront. Explain what’s included (device bundles, software) and what’s extra BEFORE the sign up process. I don’t want to see a small asterisk footnote that says the service works with the purchase of $75 VOIP adaptor right at the very end. And finally, don’t hide behind walls of flash animation and annoying forms that make users type a bunch of stuff.

Tom Keating recently talked about how to pure VOIP providers like Vonage stack up against the cable and telco companies offering broadband Internet VOIP phone services.

In the article he compares pure VOIP providers like Vonage and Packet8 to telecos and cable companies like Verizon and Time Warner. What do consumers really want? Is cost always the bottom line or are people looking for brand trust, quality of service and reliability over the long haul? His assessment may surprise you.

Click here to read the complete article on his blog.

Who is Tom Keating? He owns the VOIP and Gadgets Blog and is CTO, VP and founder of TMC Labs, one of the leading sources for unbiased opinions and reviews in the VoIP, call center, datacom/telecom industries.