AT&T Set To Raise Home Telephone Prices; Time To Switch To VOIP?

I am curious as to why AT&T would think it was a good idea to raise home phone prices in California when you can get VOIP from dozens of companies, or use Skype for mere pennies, or just use your cell phone for all your calling needs. Does it make much sense to you? I know they are only talking about California in this article, but I am sure it will spread across the country as well:

The telecommunications giant has begun notifying customers that it plans to raise monthly rates for its basic land line phone services by between 10 percent and 25 percent.

I know that when I had regular home phone service from a phone company, I paid for the all-inclusive calling plan, which was $49.99 a month for everything. Sounds good, right? Well, that $49.99 was actually about $68.00 a month due to the fees and taxes that the phone companies nickel and dime you for. Then I discovered VOIP and signed up with Vonage, and now I have unlimited calling and all the bells & whistles for $30 a month. I know there are cheaper ways to have a home phone at home, but I had a couple of reasons I went with them:

1. I wanted the phone to work when my computer was off. With programs like Skype (which is great), your computer has to be on to make and receive calls. I turn my computer off at night to save money, and just leave the internet router running.

2. I wanted to be able to use the phones we already had. With Vonage I could plug in my regular landline phone, but other systems required me to purchase different boxes or special phones – and I didn’t want the added expense.

3. I wanted to go with a reliable company that had been around for a while. Many VOIP providers come and go, while Vonage seemed to be around for a while. There was a scare with some patent issues a while ago, but I have not heard anything lately.

4. I wanted 911 service at home. Many VOIP providers do not have 911 service, but Vonage did.

We have now had Vonage with both cable internet in California and what is called “Naked DSL” here in New Mexico, which is DSL internet service over the phone lines without having to buy phone service. In both cases, the system has worked great and we have only had a few hiccups with sound quality. But at $30 a month compared to $60+, a few hiccups is well worth a savings of 50%! I probably would have considered ditching home phone service altogether, but our cell phones don’t work too well in house because of the 18 inch walls – so we had to keep the service. I didn’t really want to stand outside in the middle of winter to talk to my mom.

So if you are an AT&T customer, be on the lookout for a rate increase. With all the available internet telephony services available, there really is no reason to stick with your regular phone company and pay more than you have to. Most cable companies offer home phone service now, which is usually cheaper than the phone company, so that might be something for you to check out. And if they don’t, there are always services like Vonage or Packet 8. If you don’t mind leaving your computer on 24/7 and/or buying a new handset, you can go even cheaper with Skype, which millions of people are using. If the phone company rates are getting to be too much, just know that there are alternatives out there that work just like your regular phone but are much cheaper. No need to pay out the nose for home phone service!

What do you guys do at home? Do you go with the regular phone company? VOIP providers? Skype? Feel free to discuss in the comments!

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Comments (3)

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  1. Could it be that they are raising their rates because costs have gone up for them? That seems like the most reasonable explanation. While companies have to be mindful of what pricing the market will bear, they also have to cover their costs and hopefully earn a profit. If AT&T isn’t doing that now and has to raise rates, so be it. If they drive all their customers to alternatives and go out of business anyway, so be it also.

  2. David says:

    Very true, they should be able to raise prices. But they also should expect to lose even more business to VOIP providers as well. 🙂

  3. Patrick says:

    My wife and I only have cell phones and we are quite happy with that arrangement. I think if I need to get a landline, I will get VOIP. It should be cheaper than a standard phone service.