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Vonage - The mainstream favorite

Perhaps due to their pervasive advertising, Vonage is the leader of the conventional VoIP service provider pack. The company says its current market share is around 35%, with more than 700,000 subscribers and adding 15,000 new subscribers per week.

Vonage works on a significantly different business model, with the only free calling being no charge for calls between Vonage subscribers - once you've signed up for one of Vonage's plans. Free calling apparently isn't a big attraction for Vonage users since the company says in-network calling is only about 6% of its total. It's also interesting to note that most subscribers purchase only one line since the average Vonage customer has 1.1 - 1.2 lines.

The least expensive plan is the Basic 500 that offers 500 U.S. and Canadian minutes for $14.99 a month. The next step up is the Premium Unlimited, providing unlimited calling within the U.S. and Canada for $24.99 a month.

Vonage has a wide array of features bundled into its services, many of which your local phone company probably charges extra for. But Vonage also has charge-for options - the "Cool Options" in Figure 2 - that allow it to nudge your monthly phone bill skyward.

Vonage Features

Figure 2: Vonage Features
(click image to enlarge)

Vonage also offers two small business plans - Small Business Basic plan with 1500 monthly minutes of calling for $39.99 a month, and Small Business Unlimited offering all-you-can-eat U.S. and Canada calls at $49.99 a month. Both small biz plans throw in a dedicated fax line for no extra charge.

If you're evaluating a VoIP calling plan for your business, you may ask why not just sign up for the $24.99 Premium Unlimited rather than Small Business Unlimited, which costs twice as much. There's a good reason. As with many other commercial VoIP services, the contract for the residential flavor of Vonage has some not-so fine print that expressly prohibits commercial use.

Therefore, if you are say, a Realtor, and you try to squeak through with the cheaper Premium Unlimited, you could - at least in theory - be disconnected if Vonage ever found you out. While I haven't ever heard of that happening, it is up to you to decide whether or not to take the risk.

Vonage's international call rates are somewhat higher than SkypeOut's, but much lower than you'd pay to conventional long-distance providers. For example, you can use Vonage to call Hong Kong for 3 cents a minute, and such cities as Copenhagen and Rio de Janeiro for only 6 cents a minute.

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