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Get Home Phone Service for Less Than $10 a Month

Three low-cost alternatives to pricey, traditional home phone services

If you’re buying home phone service from a traditional provider, you’re paying too much. Internet phone products sell service via your broadband connection at dirt-cheap rates. Here’s how three stack up.

Extra features. Ooma Telo is a stylish, wedge-shaped box that’s roughly the size of your old answering machine. It costs $200, and the company advertises that it provides free, “unlimited” calls within the U.S. Caveats: There’s a 5,000-minute monthly limit on outbound calls (that’s more than three days of talk time), and you’re responsible for government taxes and fees. But these should add up to just a few dollars a month. Check your total at go.ooma.com/tax_calculator.

[More from Kiplinger: Is Your Cell Phone Bill Too High?]

A glitch with the first Telo we tested gave us a chance to try out Ooma’s customer support, which was very responsive. The Telo has a one-year warranty.

The device comes with cables to connect your router and cordless or corded phone, and setup is easy. You may select a new phone number, or port your current number for a $40 fee. The optional Ooma Premier service ($10 a month or $120 a year) offers free number-porting plus a bundle of advanced features. In our tests, Ooma’s call quality on a 6-megabit-per-second (i.e., reasonably fast) DSL connection was very good—in most cases it performs on par with landlines.

The product’s biggest downside is its $200 initial cost, but the Telo is pretty inexpensive over time. If, for example, the device runs five years, and your monthly tax bill is $3.50, your phone bill would average less than $7 per month. Can the cable guys come close to matching that?

[More from Kiplinger: 5 No-Contract Cell Phone Plans Worth a Look]

As seen on TV. Its TV ads may be cheesy, but MagicJack Plus works rather well. Roughly the size of a matchbox, the $70 gizmo plugs into an AC outlet and has ports for your phone and for your router.

Although MagicJack won’t add to your desktop clutter, it lacks Telo’s convenient touch controls for accessing voice mail. And setup is a bit tedious: You have to plug MagicJack Plus into your PC’s USB port and work through a series of start-up screens. First, you select a phone number or port your current number for $20. What follows is a series of upsell offers, including one for prepaid international calls (at really low prices) and another for replacement insurance—useful if your dog decides MagicJack is a chew toy.

[More from Kiplinger: 10 Fees You Shouldn’t Be Paying]

MagicJack Plus comes with one year of unlimited calls to the U.S. and Canada, albeit with a few restrictions. (For instance, you can’t call more than 50 different phone numbers in a day.) Phone service costs $30 annually after the first year, or you can buy a five-year plan for $100. Taxes and fees total about $1.50 per year, the company estimates.

MagicJack Plus’s call quality was nearly as good as the Telo’s in our tests. Costs average less than $6 per month for the first year, and less than $3 per month after that.

Low-price leader. Want to pay even less? NetTalk Duo costs only $50 for one year of calls to the U.S. and Canada, with a 3,000-minute monthly limit. After the first year, the service is $30 annually. Setup is simple, and porting was recently free for a “limited time.”

[Related: 5 Messy Money Mistakes]

NetTalk Duo’s call quality was on par with its competitors. Voice mail messages were easy to access: Press *98 on your phone. Like MagicJack Plus, however, NetTalk lacks the Ooma Telo’s advanced features, such as a touch-activated device for screening incoming calls and voice mail.

But for dirt-cheap phone service, NetTalk Duo can’t be beat. Averaging just over $4 per month for the first year, and less than $3 a month after that, NetTalk is the cheap-talk champ.

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