Eliminate your phone bill & Save $1,000/year: Cut the Cord!

Save $1,000 per year by eliminating your Residential and Long Distance charges!
You can get more for far less: eliminating your $70 Telephone and Long Distance bill, and obtain the same services (and unlimited use) for $10/month. I’m saving $100/month in combined savings of telephone, Long Distance, and feature charges. Which would you choose:

Follow the flow chart and see which of the following options is best for you:

Several plans exist that allow you to get more for less: maintain the same telephone service (i.e., no changes in how you use the phone or the features that you expect to receive) at a fraction (15%) of the price. You can use these plans with assurance, as these plans work, are well-reviewed, widely-available, and are mature. These services have been serving customers for 5 years, so jump in the pool! The water is fine.

What you choose depends on your preferences:

  • Fixed at home
    (“I prefer to use wireline and cordless phones when at home, and do not intend to use a mobile phone”)
  • Fixed at home & mobile away from home
    (“I prefer to use wireline and cordless phones when at home instead of my mobile phone”)
  • Mobile-only
    (“I prefer to make/receive all of my calls with my mobile phone”)

A) You prefer: Fixed at home

You just want to reduce your costs without having to change the way that you use the phone.

Your Choices: You can obtain Internet telephone service from Vonage (in the U.S.), your Cable company, and your local Telephone company, in order of increasing cost (and decreasing savings). Many folks that are considering this step will prefer to choose a trusted partner–the existing Telephone company. However comforting, obtaining a replacement service from the phone company will likely save you less. But check out the prices and see for yourself which price plans are best for you. Beware of “teaser” rates, such as $9.99/month (small print: only for the first X months, then increasing to a much higher monthly rate). This option is increasingly unattractive: since nearly everyone has a mobile phone, why not consider a choice that gives you all of these benefits as a bundle with your mobile service (next Option B)? For more information on this option, please see the excellent, recent article “Switch to Internet Calling” [Glenn Fleischman, MacWorld, October 2009]–an excerpt of his article is available online here.

Vonage, for example, offers a basic $18/month 500-minute plan. Please note that this is far inferior to the $10/month bundle that you can achieve with T-Mobile’s @Home service (described is the “Savings Example” above, and below under “Fixed at home and Mobile away”).

Note: You do not have to lose your phone number; you may keep your home phone number and “port” your number to your Internet phone (or to another service, such as Google Voice, that bridges your home phone number with one or more devices, including your mobile phone, office phone, etc.). To keep your phone number, be sure to request this when you sign up for service with your new carrier, as they will take responsibility to promptly and seamlessly make this change.

Advantages:
Average cost savings of $37/month (using FCC averages, your savings will depend on your current bill)

Disadvantages:
Obtaining telephone service from a cable/Internet company means that you are more likely to keep their service.
Potentially poorer customer service (harder to troubleshoot than keeping service from the Telco).

B) You prefer: Fixed at home & Mobile away from home

You want to keep your existing home phone number and devices (along with cordless phones and answering machines), but you also use a cell phone

Your Choices: Mobile phone companies are starting to offer this option: a bundle that replaces your wireline service, while allowing you to keep your home phone number and devices. T-Mobile offers an excellent choice (in the U.S.) that gives you every feature that you can imagine for $10/month … if you use their cellular service. That’s the catch: each of these service bundles replaces your telephone service. For more information on this option, please see the excellent, recent article “Save Cell Phone Minutes by Placing Calls over Broadband” [Glenn Fleischman, MacWorld, October 2009]–an excerpt of his article is available online here.

Note: You do not have to lose your phone number; you may keep your home phone number and “port” your number to your Internet phone , your cellular phone, or to another service, such as Google Voice, that bridges your home phone number with one or more devices, including your mobile phone. To keep your phone number, be sure to request this when you sign up for service with your new carrier, as they will take responsibility to promptly and seamlessly make this change.

Advantages:
Average cost savings of $45/month (using FCC averages, your savings will depend on your current bill)

Disadvantages:
Obtaining telephone service from a cellular company means that you are more likely to keep their service.
Potentially poorer customer service (harder to troubleshoot than keeping service from the Telco).

C) You prefer: Mobile-only

Your Choices: Mobile phone companies are starting to offer this option: an option that lets you reliably and inexpensively use your mobile phone in place of your home phone. You have options, so choose depending on your preferences:

C1: You prefer Mobile-only, and get great coverage at Home

Any mobile carrier will sell you service that includes ample minutes (allowing you to use the phone all that you want, including at home), but there are even better options (read on).

Advantages:
Average cost savings of $40/month (using FCC averages, your savings will depend on your current bill)
Choice of cellular company; if you do not like the coverage or service that you receive, you can readily change carriers.

Disadvantage:
You lose use of any cordless phones, answering machine, FAX devices in your home.

C2:  You prefer Mobile-only, and want better coverage at Home

Some mobile carriers will sell you service with an option for an in-home cell site. Really! You don’t have to be John McCain to get your own cell site (called a “femtocell”). Verizon Wireless and Sprint already offer this option, and AT&T will shortly. T-Mobile offers a different solution that lets their phones make high-quality calls over any Wi-Fi (in your home, or around the world), so it requires that you use a phone with UMA (Unlicensed Mobile Access) with Wi-Fi. For a more detailed comparison of the implementation costs, please see my review comparing the Sprint vs. T-Mobile solutions.

Advantages:
Average cost savings of $45/month (using FCC averages, your savings will depend on your current bill).
Choice of cellular company; if you do not like the coverage or service that you receive, you can readily change carriers.

Disadvantage:
You lose use of any cordless phones, answering machine, FAX devices in your home.
@Home service requires that you use a compatible (UMA) phone that makes calls over Wi-Fi, when possible.

C3: You prefer Mobile-only, and want unlimited, free calling at Home

Free, unlimited, at Home service

T-Mobile’s @Home service is a great deal (available in the U.S.) that gives you unlimited calling (including Long Distance calling to U.S. numbers), voice mail, three-way calling, caller ID (including Name) – a service bundle costing $50 or more from your Telco – for only $10/month. This is one smokin’ deal. (I use it in my Home Office each day).

Note: You do not have to lose your phone number; you may keep your home phone number and “port” your number to your cellular phone (or to another service, such as Google Voice, that bridges your home phone number with one or more devices, including your mobile phone). To keep your phone number, be sure to request this when you sign up for service with your new carrier, as they will take responsibility to promptly and seamlessly make this change. For more information on this option, please see the excellent, recent article “Save Cell Phone Minutes by Placing Calls over Broadband” [Glenn Fleischman, MacWorld, October 2009]–an excerpt of his article is available online here.

Advantages:
Average cost savings of $45/month (using FCC averages, your savings will depend on your current bill)
Choice of cellular company; if you do not like the coverage or service that you receive, you can readily change carriers.

Disadvantage:
You lose use of any cordless phones, answering machine, FAX devices in your home.
@Home service requires that you use a compatible (UMA) phone that makes calls over Wi-Fi, when possible.

Mobile-only is an increasingly compelling choice for nearly all consumers. Already, 25%of U.S. households have cut the cord in favor of mobile-only telephone service. For more info on this trend, see my earlier post on how and why consumers cut the cord.

P.S. This recommendation is written by a Bell Labs engineer who spent many of his early years designing and delivering the world’s best telephony service. So you can be assured that I do not make a recommendation to ditch it unless the options are clearly better. But technology moves on. In fact, AT&T recently asked the FCC “How long do we have to maintain the wireline network?” which effectively says that the wireline network is becoming obsolete and consumers will increasingly migrate away from fixed to mobile and Internet telephone service over the next few years.

Your Savings vs. Typical Savings

Your savings are best determined by your monthly bill—go grab one to determine what you are paying now and what you can actually save.

Typical Telephone charges of $43/month: The FCC reports that the average, residential telephone bill (in an urban center, in October 2007) is $43/month.

Typical Long Distance charges of $12/month: The FCC and other organizations report that the average Long Distance bill is approximately $12 (120 minutes x $0.06/minute), although this varies widely, depending on use.

Typical savings could be $540/year. A “typical” consumer would save less than I experience: an average bill is $55/month could be reduced to $10/month., yielding a savings of $45/month.

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