Skype or Voip Can Help Save on Home Phone Bills

As if navigating wireless and traditional phone plans wasn't enough, you have another option to consider: Web-based phone service, otherwise known as voice over Internet protocol.

If you're looking to lower your phone bill, it's a welcome option.

Someone with a traditional landline, for instance, who switches to VoIP can save $300 annually, said Allan Keiter, of MyRatePlan.com (assuming the average landline costs $50 per month).

How? Because your voice travels over the Internet, not phone lines, you don't have to pay most of the taxes that are tacked on phone bills.

Plus, competition has pushed down rates. Packages for unlimited calls in the U.S. start as low as $15, not including the cost of your broadband connection.

Sound like a good deal? Different plans are better (as in cheaper) for different types of phone users. Here's a quick rundown:

-- If you've already cut the cord

Most wireless plans already include local and national calling for a flat rate each month. If you use a cell phone exclusively--as 5 percent of households with a wireless phone do, according to Forrester Research--getting a VoIP plan with unlimited calling may be redundant.

Instead, consider a PC-to-PC service. Basically, it's the audio version of instant messaging: You plug a headset into your computer and call people in your buddy list--for free. Google, Yahoo, MSN and AOL all offer a version.

With these services you can't make calls to other phones or mobiles. But organize your friends and family--even those living abroad--and you can talk for hours at no cost.

If occasionally you do want to call a regular phone, providers such as Skype and Yak for Free let you connect with prepaid minutes. The option is especially appealing for anyone who makes calls abroad since rates are as low as 2 cents per minute.

-- If you're replacing a landline

When you're looking to replace a landline, however, a better option may be to use a phone-based VoIP service. Find a list of providers by going to www.cnet.com and clicking on "Voice over IP."

With this system, you take a regular phone and plug it into an adapter, which then plugs into your router or modem. Service plans usually have unlimited calling within the U.S.--you don't pay per minute as with Skype--and low international rates.

In addition, features you'd often pay extra for with a landline, such as voice mail, call waiting and caller ID, are included. Also, if you move across country, you don't have to give up your number. It's tied to the adapter, not the phone jack.

And for an additional fee, you often can add a line from any area code in which your provider has coverage. So if you live in Chicago and your family lives in Seattle, they can make a local call to reach you.

-- What else to consider

The audio quality of VoIP calls and the reliability of the service generally still lag traditional landlines, according to a January study by Keynote Systems, which advises companies on their online performance.

"If you're not too tolerant of voice delays, then don't focus on just the price point" in selecting a provider, said Dharmesh Thakker, who led the study, which ranked Time Warner Digital Phone at the top.

At the same time, you're at the mercy of your Internet service: Should the power go out or your broadband connection stop, you can't make calls.

Finally, not all VoIP providers have adopted enhanced 911, or e911, which allows emergency operators to identify a caller's location if he or she isn't plugged into a phone jack. Of those that do, you have to register your address--and remember to do so every time you move.