Technology Explained

3 Things to Know Before Switching to a VoIP Phone Plan

Joel Lee 24-06-2016

VoIP this, VoIP that. You’ve probably heard of this thing called “VoIP” mentioned time and time again over the past few decades, but maybe you still don’t know what it is exactly.


If that’s the case, don’t worry. You aren’t alone!

The term VoIP, which simply means Voice-over-Internet-Protocol, actually sounds more technical than it should be. In essence, VoIP is anything that lets you speak with someone using an internet connection instead of a landline or a mobile phone.

You know how SMS is actually called “texting” by most people? VoIP doesn’t really have a colloquial counterpart, which is probably why it’s so intimidating. Just think of it as “voice chat”, which is close enough for practicality’s sake.

Now the question is, can VoIP replace your mobile plan? What are the benefits of doing so and what potential drawbacks will you have to deal with? Here’s all you need to know to make a smart decision.

1. How VoIP Actually Works

You should know that VoIP can actually mean two different things depending on the context:

  1. Using the internet to make a call to someone’s phone.
  2. Using the internet to voice chat with someone, no phone numbers involved.

Three good examples of the first kind are Skype and Google Hangouts (software) as well as Vonage (hardware). All three allow you to dial phone numbers and converse with recipients using a microphone, usually through your computer but mobile apps are common too.


The difference between Skype/Google Hangouts and Vonage is how the internet data gets converted into telephone data. With a software solution like Skype/Google Hangouts, your computer does the converting. Vonage, on the other hand, provides a dedicated device that plugs into your router and handles the conversions.

Several good examples of the second kind include Mumble, TeamSpeak, Ventrilo, and Skype’s Skype-to-Skype feature.


Most of these tend to be server-based — users connect to a server, join a particular channel, and can then chat with anyone in that channel. That’s why these services tend to be used most often by gamers The Best Free Voice Chat Apps for Gaming Here are the best free voice chat apps for gamers, along with their pros and cons, to help you pick the best one. Read More .


One-to-one solutions are less common but they do exist, such as Viber, Linphone, and Facetime.

Other than that, VoIP is actually quite straightforward to use. Using whatever app or service you pick, all you have to do is dial a phone number (first method) or select one of your contacts to voice chat with (second method) and just talk into your microphone. That’s it.


Going forward, we’re only going to talk about the first kind of VoIP: the kind that includes the ability to make calls to actual phone numbers using only the internet. We’ll call these “VoIP phone plans”.

2. The Benefits of a VoIP Phone Plan

VoIP phone plans are pretty straightforward. All you need is the actual app (if going the software route) or a VoIP adapter device (if going the hardware route). Then, you can either pay per minute OR pay per month. Rates differ between service providers.

How does switching to a VoIP phone plan benefit you? Here are some of the main advantages you’ll be able to take advantage of as soon as you switch.

1. It can save you a significant amount of money. Take Skype for example. Using the pay-as-you-go method, you end up paying $0.023 per minute when calling mobiles or landlines in the U.S. That’s about $1.38 per hour.



Or you can opt for a Skype Unlimited plan, which gives you unlimited minutes to the U.S. for $2.99 per month, the U.S. plus seven North American countries for $6.99 per month, or the U.S. plus 62 worldwide countries for $13.99 per month.

Google Hangouts is even cheaper: all calls to the U.S. and Canada are free from anywhere while most international calls are just cents per minute.

And in most cases, service-to-service calls are always free regardless of where you are. For example, Skype-to-Skype, Hangouts-to-Hangouts, Viber-to-Viber, etc.

2. It can work with devices that have no mobile plans. If you have a spare smartphone lying around 10 Creative Ways to Use Your Old Smartphone Why sell or throw away your old smartphone when there are so many ways for you to reuse it? Some of those reuses might be more creative than you thought. Here are some ideas. Read More that doesn’t have an active mobile plan attached to it, you can still use it as a phone by installing a VoIP app.

This will let you make calls from anywhere as long as you have a Wi-Fi connection. Yes, public hotspots count! As long as you’re aware of the security risks in using public Wi-Fi 3 Dangers Of Logging On To Public Wi-Fi You've heard that you shouldn't open PayPal, your bank account and possibly even your email while using public WiFi. But what are the actual risks? Read More , this is an awesome way to recycle old phones.

3. It can work with existing landline phones. Using a device like the OBi200 VoIP Phone Adapter or the Ooma Telo Home Phone Adapter, you just plug in your landline phone, and outgoing calls will be made over the internet. Simple enough, right?

4. Some VoIP providers let you choose your own phone numbers. Not all of them do, but Skype and Google Voice are two examples where this is possible. Skype charges about $6.50 per month for one while Google Voice is free.

5. It often comes with extra features. If you use app-based VoIP like Skype or Google Hangouts, you’ll also be able to send text-based messages and even hold conference calls with multiple recipients.

3. The Downsides of a VoIP Phone Plan

All that being said, VoIP phone plans aren’t perfect. Many people have a lot to gain by switching, but it isn’t the right solution for everybody. Before you dive in, here are some things you want to consider.

1. Voice quality depends on your internet connection. On average, VoIP calls use up about 50 to 90 kbps of bandwidth. That simply measures how much data is transferred per second. The more bandwidth you have, the more data can be sent, and more data means better voice quality.

That much bandwidth may not seem like a lot, but you have to remember that your internet isn’t dedicated only to VoIP. If you’re playing games, downloading big files, or watching YouTube/Netflix, your VoIP quality may suffer.


As such, we recommend an internet connection of at least 5 Mbps up and down each way. We also recommend tweaking Quality of Service on your router How to Fix Gaming & Video Lag With an Easy Router Tweak Tired of network lag when other people are watching videos and downloading torrents? Here's how to reclaim your network performance without any third-party tools. Read More to prioritize VoIP traffic.

2. It may cost more if you have metered data. VoIP is the cheaper option for a lot of folks, but if you have to pay for data per gigabyte or if you have a monthly cap, then you may want to stay away from VoIP, especially if you make frequent calls.

Assuming most VoIP calls use 20 to 90 kbps, that’s between 150 to 675 KB per minute (or 9 to 40 MB per hour). It’s not a lot when compared to web browsing or video streaming, but it’s still significant. If you aren’t careful, you may hit your data caps faster than you expect Why Do Data Caps Exist and How Can You Bypass Them? ISP and mobile data caps are frustrating, but why do they exist? Here's how to bypass your data cap and enjoy limitless internet. Read More .

And if you use VoIP over 3G/4G/5G data, you’ll end up paying even more. Ouch.


3. Security and privacy can be an issue, especially over wireless. And I don’t just mean the “NSA is spying on you” What Is PRISM? Everything You Need to Know The National Security Agency in the US has access to whatever data you're storing with US service providers like Google Microsoft, Yahoo, and Facebook. They're also likely monitoring most of the traffic flowing across the... Read More brand of privacy invasion. With VoIP, there’s a very real chance that strangers can eavesdrop on your conversations.

Not that it’s commonplace or anything, but the possibility is always there. The biggest vulnerability is that the global IP network is public whereas telco networks are closed, which is why you should use encrypted VoIP apps whenever possible 6 Open Source Messaging Apps More Secure Than Skype Skype has never been the most safe or secure communication protocol, and after Microsoft took over in 2011, concerns over privacy began to pile up. Can these secure, open source alternatives allay those fears? Read More .

And when connecting to a public Wi-Fi network, you may want to take extra precautions to guard against insecurity How To Combat WiFi Security Risks When Connecting To A Public Network As many people now know, connecting to a public, unsecured wireless network can have serious risks. It’s known that doing this can provide an opening for all manner of data theft, particularly passwords and private... Read More .

How Does VoIP Sound to You?

I know we mainly focused on Skype in this article, but you should know that plenty of cheaper alternatives exist out there Cut the Cord With 4 VoIP Phone Plans That Are Cheaper Than Skype Cost-cutting is all the rage at the moment. In this article, we show you how four VoIP cheap alternatives could help slash your telecommunications bill. Read More . We highly recommend Google Hangouts, MagicJack, Viber, or Ooma depending on your specific needs.

Or maybe you’ve decided that VoIP isn’t for you. That’s fine! However, if that’s the case, then we urge you to check out these alternative mobile phone plans The Best US Cellular Data Plans for Your Smartphone Though mobile phones have improved over the years, cellular plans have either stayed the same or gotten worse. Luckily, we've found the best deals for US smartphone users. Read More that may end up saving you money in other ways.

So what’s your verdict? Will you be using VoIP or would you rather look elsewhere? If so, which VoIP provider do you like best? Share with us in the comments below!

Image Credits: Phone Pad via Shutterstock, Viber via Shutterstock, Skype via Shutterstock, Free Wi-Fi via Shutterstock

Related topics: Google Hangouts, Mobile Plan, Skype, VoIP.

Affiliate Disclosure: By buying the products we recommend, you help keep the site alive. Read more.

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  1. Thess
    April 17, 2017 at 5:39 am

    Not all VoIP has emergency services either (911 etc) how was this not mentioned?
    In fact I think most don't.

  2. bromberg
    October 29, 2016 at 6:32 am

    Another downside is that my alarm company (ADT) does not support Ooma's VOIP even though Ooma produces dial tone for the alarm.

  3. Sigh
    October 20, 2016 at 2:31 pm

    Please write about VOIP product brands by user need levels, connection services which need to go or not to go with them, reliability, cost differences, fee charged above the Internet connection monthly charges. Please write about those who have Comcast Internet and TV but also need the phone service (could they get away with not paying for VOIP monthly service fees if they bought a VOIP instrument themselves), malware and anti-virus problems with VOIP, out of power situations, emergency numbers access.

  4. Guest
    June 27, 2016 at 1:12 am

    VoIP is terrible. Wireless, cordless, it all sucks.

    Wired is the only way to go. POTS is a necessity for everyone. We should just get rid of mobile phones and just use landlines. Those were the good old days...

    You don't need to worry about internet connectivity, power loss, call quality, repairs, breaking your phones (heck, you can use the same phone for 100 years with no wear and tear).

    Smart people use landlines. Dumb people use wireless

    • Joel Lee
      July 4, 2016 at 1:58 am

      A bit harsh to call them dumb, but you're free to have your opinions. Thanks for the input.

  5. Doc
    June 25, 2016 at 9:20 pm

    Missed an important point about VOIP: If your Internet connection goes down, so does your phone. Especially important if it's a power outage (tradition "POTS" service is powered by the phone line, as long as you have a phone that doesn't require power, like a cordless phone).

    Where have you been with this info? I've been on VOIP for years - Vonage, Time Warner Digital Phone, and now BasicTalk...which is the cheapest of the lot.

    • Joel Lee
      July 4, 2016 at 1:56 am

      Yes, very true! With how often the internet goes down in some areas, VoIP would be a terrible choice there. As for coverage, yeah VoIP has been around a while, we're just late. :P Better late than never.

  6. Erin
    June 24, 2016 at 2:13 pm

    I switched from vonage to Google voice (with an obi box), almost 5 years ago, and have saved $2000. Going from $35 to free was definitely the right decision for me!

    • Joel Lee
      July 4, 2016 at 1:47 am

      Awesome! Nice to hear that Obi Box worked for you. Thanks for sharing Erin. :)