Five Ways to Cut Monthly Phone Expenses

With consumer sentiment at rock bottom due to the ongoing credit crisis and the US economy on the verge of recession, many consumers are seeking ways to reduce monthly expenses.  A relatively painless way to reduce expenses is to eliminate goods and services that are paid monthly but not needed or fully utilized each and every month.

Telecom services fall into this category for most people since many telecom companies have been very successful at bundling services and selling consumers packages of services that they do not fully utilize.  Many of these packages sound like good deals but they are really just high priced conveniences since most consumers do not fully utilize or even need all of the services in the package.  A smart way to reduce monthly expenses is to rationalize these packages by removing services that are not needed or fully utilized and paying for them separately, as needed.   It is often better to shop around in order to find the best deal on the desired services rather than purchasing them from one service provider.  The following are some examples where phone related expenses can be significantly reduced.

Use Prepaid Long Distance

With the proliferation of cell phones many people question whether the traditional home phone is really necessary any more.  Many households maintain a home phone even though they have a cell phone family plan where all members of the household have a cell phone and individual phone number.  For many, keeping a traditional home phone is a sensible option since it is cheaper than paying for cell phone air time for receiving calls, calling toll free numbers or making local calls.  It may also be necessary for emergencies (911 calls) or for alarm systems or other monitoring devices.  However, traditional long distance phone service is likely not necessary or even an economical option. 

In most cases using prepaid long distance is a far cheaper option than using traditional long distance from the phone company.  Prepaid long distance like that offered by Tel3Advantage is very convenient and costs nothing if it is not used.  So consumers only pay for calls they actually make at dirt cheap rates with no taxes or added fees.  Tel3 only charges 1.9 cents per minute for long distance calls made to North American (USA and Canada) destinations.  This means that a consumer can use more than 500 minutes for a mere $10.  Rates are slightly higher for international calls depending on the location called but they are up to 95% cheaper than phone company rates.  It is also easy to open an account and there is nothing to change, it can be used from any phone or with any existing phone service.  An account can be opened by visiting the Tel3Advantage website or calling 800 441 0321.

Replace Your Existing Traditional Home Phone with a VoIP Phone

Consumers who want traditional home phone service and already have high speed INTERNET should consider adding a VoIP Phone. Home phone service from the phone company is very expensive when compared to VoIP, especially when one considers all of the added fees and taxes.   In comparison, a VoIP phone that includes local phone service, unlimited long distance in North America and every conceivable feature costs as little as $15 to $20 per month (including taxes and fees).  Compare this with your next phone bill.

A VoIP service provider will typically provide a modem and other necessary equipment at no additional charge.  There will usually be a small setup and activation fee but most VoIP service providers will also provide a bonus for new customers, like one month of free service, so setup costs are minimal.  It is relatively easy to save between $60 and $80 per month by using VoIP phone service instead of a home phone from the telephone company.  To be fair, VoIP does have limitations.  It is less reliable than traditional phone service since it needs both electricity and an active INTERNET connection or it will not work.  Also, VoIP will typically not work with home alarm systems or other monitoring devices.  However, people can still save significant money by mixing the two services.  For example, people who need a secure, reliable connection can get a cheap, basic land line from the phone company and install a VoIP phone for making their expensive long distance calls. 

Use Free PC to PC or Cheap PC to Phone Service

Consumers can make Free calls using their computers and an INTERNET connection with PC to PC or PC to Phone service.  Companies like Skype provide Free software for making free calls over the INTERNET between computers.  The software is downloaded from their website and can also be used to make computer to standard telephone calls to any phone in the world.  However, there is a charge for calls to a standard telephone, this is how companies like Skype make money.

Computer to computer (PC to PC) calling is typically Free if both parties download software from the same company.  This is obviously the cheapest option for making long distance calls, especially between international locations.  However, it does have drawbacks and limitations.  For one, both parties need to have a personal computer and an INTERNET connection.  They also need to be on-line at the same time so some coordination is required.  Also, some countries try to block or downgrade Skype calls in order to protect their high cost monopoly phone companies.  For those who can work around these shortcomings, PC to PC calling is a very good and extremely cheap option for making international long distance calls.

Make Cheap International Calls from any Country with Callback Phone Service

International Callback phone service is a popular option for making cheap international calls from countries that have very expensive monopoly, often state controlled, phone companies.  These countries block outside competition in order to keep their international calling rates artificially high.  Rates on Phone Cards also tend to be high in these countries and they often actively block the use of the INTERNET for making low cost calls.  These countries want to force consumers to use their high cost phone company. 

In most cases, international callback can be used to avoid the high tariffs imposed on international phone calls in these countries.  International callback by-passes the high cost monopoly company by placing the international call through a low cost third country.  It works in the following:

1. The user triggers a call to from a phone located in a low cost third country.  The call is triggered by making a call to a special phone number (letting it ring one or two times with no answer) in the third country or by sending a message like an e-mail or a text message from a cell phone.


2. The phone (computer) in the third country recognizes the user and places a call to there phone in the high cost country.


3. The user answers the call and has a dial tone.  The user can than place an international call over the third countries low cost network  by dialing the phone number they desire.  

Callback calls are normally triggered using three different methods.  The most common method is to place a call to a phone number in the third country.  The caller will let the phone ring two or three times than hang up without an answer.   In this way they are not charged for an international call.  A computer at the other end will recognize them based on their phone number and place a call back to their phone number.  Thus the term callback phone service.  When the call is received, the caller will be in the low cost phone system and can place a call to any country in the world.  This method of triggering a call is referred to as traditional callback.  Another method, commonly called web call, uses a standard e-mail message to trigger a callback and place a call.  A third method, commonly called SMS call, uses a text message from a cell phone to trigger a callback and place a call. 

Several countries try to block callback in order to protect their high cost, monopoly phone companies.  Blocking traditional callback is relatively easy since it relies on caller ID in order to recognize the customer.  Blocking web call or SMS call is difficult or impossible so these methods can be used from almost any country. 

Callback phone service can be obtained through a variety of service providers.  The service is almost always provided on a prepaid basis.

Use a Prepaid Cell Phone

Mobile phones are great to have in case of an emergency and a nice convenience but most consumers find them an expensive option especially if they are locked into a long term contract.  Many people do not use all of the minutes they pay for each month so having a long term contract is a waste of money.  One way to avoid paying for unnecessary cell phone services is to purchase a prepaid cell phone.  Prepaid minutes are rather expensive, usually around 10 cents per minute, but a far cheaper option for people who rarely use a cell phone but want one as a convenience or for emergency use.  In most cases consumers need to purchase a phone and prepay minutes in standard denominations  but many prepaid cell phone providers offer rebates and other incentives on phones.  Consumers should shop around for the best deal on a prepaid cell phone.  Also, prepaid cell phone refill cards (minutes) can be purchased at a discount to face value from a variety of discounters for some added savings