Broadband connections can cut your business phone bills

by  Alan Zisman (c) 2005 First published in Business in Vancouver March 29-April 4, 2005; issue 805 High Tech Office column


VoIP (Voice over Internet Protocol) started life as a way for computer users to talk to one another without racking up long distance telephone charges. It popped up again as expensive hardware systems merging corporate data and phone networks. Last Fall, Skype began allowing Internet-connected computer users to speak to other Skype users anywhere in the world for free or to connect to anyone's phone for a fraction of traditional long distance rates.

But talking on a headset connected to a computer isn't a particularly comfortable way for many of us to have our phone conversations. And it's not a way for others to phone us.

Vonage (www.vonage.ca) offers Internet-based phone service, targeted at home and small business users who already have a broadband Internet connection and who would prefer to make and receive phone calls using a standard telephone rather than at a computer terminal.

With a Vonage account (starting at around $20 per month) the subscriber plugs an Internet phone adapter into his cable or DSL modem or router, then plugs any standard phone into the adapter. (Vonage offers several models of adapters, including some with wired or wireless router capability through London Drugs at prices starting at $75). Within a few moments, there's a dial tone and you're in business. No software installation or messing with computer settings needed.

With the phone in action, you just dial and receive calls. There are a couple of differences from standard phone service, however. The first is cost. The basic $20 per month plan includes 500 minutes anywhere in Canada or the U.S. A $40 plan promises unlimited calls within the two countries. (Small business rates are higher: $70 per month for unlimited calling for example.) International calls are cheap: London or Hong Kong for $0.04 per minute, for example.

Other features might also be worthwhile. There's nothing limiting you to a local phone number. If you have a lot of clients out of town, you might prefer to set up your Vonage account with a New York or Toronto area code letting those customers reach you as a local call. Or set up a virtual number in the U.S., U.K. or Mexico that rings through on your local Vonage line.

Vonage's SoftPhone lets customers use a Windows or Mac laptop or desktop as their Vonage phone, handy when on the road. ($13 per month can get an additional phone number for your laptop). Or pack your Vonage phone adapter with you when travelling; plug it into your hotel's Internet cable and make your calls bypassing the hotel switchboard. Your phone number is programmed into the adapter and travels with you.

A separate dedicated fax line is included in Vonage small business accounts and a $13 per month extra on the home accounts. As with the voice service, any standard fax machine can be plugged into the phone adapter. Web-based voicemail lets you check your messages from any Internet-capable computer.

While PayKiosks Internet Terminals is based in Vancouver, the company's business is largely in the U.S. According to company president Scott McInnes, Vonage has allowed PayKiosks to reduce long distance charges and cell phone costs from $2,000 per month to next to nothing.

"Our business is done almost entirely over the phone with almost all of the calls being long distance. Each time we add a new member to our sales team we order a new Vonage line specifically for them. If they're working from home for the day they can take the Vonage box with them and still have the same number. When our technical team is in the U.S. installing one of our terminals or wireless systems in a hotel, they use the Vonage SoftPhone. This all but eliminates the need for them to use their cell phone."

Out of 4.5 million broadband connections in Canada, approximately 30,000 were being used for phone connections at the end of 2004. Some expect that number to jump to 1.6 million by 2008.