Home Phone Calculator: How Much Can You Save by Switching to VoIP?

Dennis Peng profile image May 24, 2021 | 4 min read

Telephones are a necessity in today’s world, but you don’t need to limit your choices to the plans available from traditional phone companies.

There are alternatives from Voice over Internet Protocol (VoIP). VoIP home phone providers, such as Ooma, transmit your calls over the Internet, rather than through traditional telephone cables or cell towers, at much lower rates.

How much can you save by switching to Ooma? Read on to find out.

What does your current phone cost?

Let’s start with landline phone service. A research report by the Center for Disease Control’s National Center for Health Statistics estimates that during the first half of 2020, less than 32% of Americans lived in a household with a traditional landline phone. On average, a landline costs $42 per month. As to the VoIP phone hardware, you probably already have a cordless home telephone on hand, but purchasing a new one would cost about $40 for a basic model. So annual costs for landline phone service and hardware would be $544.

Read about switching from VoIP to landline here.

Now, on to cell phones. According to Pew Research, 97% of Americans have cell phones, up from just 35% in 2011. J.D. Power estimates the average unlimited data plan costs $157 per month. Although the new iPhone 12 Pro will set you back $999, the average cost of a smartphone in the U.S. was expected to be $580 in 2020. That puts the average cost for annual service plus new hardware at $2,464. 

illustration of hand cutting a cord that is shaped like a dollar sign

As to VoIP, average costs vary widely based on the service package and the provider, making it nearly impossible to identify typical rates for the industry. However, we can tell you that switching to VoIP phones is a popular choice and you can even port your phone number. In 2021, the VoIP market in the U.S. is forecast at $13.8 billion, while the total landline revenue in the U.S. is expected to total $1.1 billion in 2021.

How much does Ooma VoIP home phone service cost?

Ooma’s VoIP home phone service options start with Ooma home phone services, which is the ultimate low-cost phone service. The monthly rate is free. You only pay a few dollars per month for applicable taxes and fees. Basic customers get unlimited U.S. calling, the use of Ooma’s free calling app, calling integration with Amazon Echo, access to 911 service, and many other advanced calling features to provide you with a high-quality home phone.

Consumers who want even more phone features can upgrade to Ooma Premier. With Premier, the unlimited calling plan expands to include Canada, Puerto Rico, and Mexico. Voicemail services expand to include audio forwarding to email, real-time message monitoring, and Do Not Disturb mode. Privacy services include customizable call blocking against telemarketers and scammers. And Premier customers using Ooma’s free calling app gain the additional feature of being able to receive incoming calls as well as placing outbound calls, which is especially useful when traveling overseas. These Premier features and more are available at $9.99 per month with no contracts or annual fees.

Ooma Telo base station sitting on a kitchen counter

Both of these plans start with the purchase of an Ooma Telo device that is the central hub for routing your phone calls. While many VoIP providers do not require a hardware purchase, using the Ooma Telo provides the major advantages of high-quality call clarity and Internet bandwidth optimization. The Ooma Telo is available at a one-time cost of $99.99, and the wireless Ooma Telo Air costs only $129.99.

Estimated Savings by Switching to Ooma

To estimate home phone savings, let’s start by calculating your Ooma phone bill. First, there’s the one-time purchase of an Ooma Telo for $99.99. Then, because there are no monthly charges for calling, you’d pay only the required taxes and fees. Depending on your postal code, the total charge can be between $4 and $7 per month. And because Ooma Telo is compatible with analog phones, you don’t need to buy a new home phone. So that puts the first-year cost for Ooma at $148-184 for both hardware and service.

Compared to the annual landline cost of $544 we cited above, you would save $396 in the first year after switching to Ooma. That’s up to 73 percent savings on your landline phone costs. Because you only need to make a hardware purchase the first year, your savings in subsequent years would be up to 91 percent off landline rates.

Telo base station under heading of Free home phone service, pay only applicable taxes and fees

Comparing Ooma to the average annual cell phone cost of $2,464 cited above, the savings are also significant. In the first year, you would see up to 94 percent savings after switching to Ooma, or more than $2,300. While it might be only extreme shoppers who are willing to forgo both a cellular device and data service, this comparison does indicate the amount of savings that are possible when using Ooma.

How do I get started with Ooma phone service?

We’re happy you asked! To get started with Ooma, visit Ooma residential to shop for hardware, purchase calling plans, and download the free calling app.