Why Skype is Better than Ooma


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Ooma has a lot of buzz and hype around it, despite still being in private beta. But let’s look beyond the hype and compare Ooma with other telephony services. I’m specifically choosing Skype although there are other players to consider. This will give a good idea how Ooma stacks up against Skype and for who Ooma may make sense.

First, looking at features, both Skype and Ooma offer unlimited calls to telephone numbers in the U.S. and voicemail. In addition, Skype has a nice colorful user-interface where you can set your presence status and see your contacts’ (buddies) presence status. There’s also Instant Messaging (IM) capability, and the ability to call both telephone numbers and buddies, no matter where they are in the world. While Ooma charges for all international calls, Skype only charges for International calls to telephone numbers (calls to buddies anywhere are free). Skype also higher voice quality because it uses high-quality codecs (e.g. iLBC) that provides better than toll-quality (what you get with landline phones) that is even good for music. The good thing about Ooma is that you can just use a single telephone number to reach all the contacts (kinda sorta like GrandCentral). Whereas for Skype, there’s a buddy name and a telephone number.

Also, neither offers 911 service, so you still need a local service for 911. In addition, Ooma users your local telephone service. Of course, a broadband service (e.g. DSL, cable) is also required.

Next, Ooma has several concerns about it service, especially relating to privacy. It’s all on this page, and there’s no need to replicate it.

Last but not the least, lets look at price. Ooma costs a flat one-time fee $399. There’s talk about a monthly charge for premium services, but that’s in the future so let’s ignore that for now. On the other hand, a Skype-enabled cordless phone or a WiFi phone costs about $150 (the Netgear WiFi Phone is $120 after a mail-in-rebate). The SkypeOut service to call anyone in the U.S. and Canada is $29.95 per year. SkypeIn (so your buddies can dial a phone number to reach you) with Voicemail costs $60 per year. That’s $90 per year or a whopping $7.50 per month. The cost of a Skype system is even cheaper, considering that Ooma costs up front and Skype costs on an annual basis. Skype devices also come with some nice extras – the SMC WiFi Phone ($160) comes with a free FON WiFi Router and + 12 months of Skype Voicemail. You can use the WiFi router for other purposes as well and comes with a revenue-sharing opportunity.

The break-even price is about 3 years. In other words, Ooma is cheaper if you keep it for more than 3 years. Till then, Skype is the cheaper option. Overall, Skype is a better option for most people because their time-span for electronics is less than 3 years. Three years is a long time – people tend to break things, want to get new stuff, or wont have the receipts when equipment breaks down

7 Comments

  1. @ E: Ooma doesn’t offer 911. However, if a customer has a local telephone service, then the customer already has 911 as part of local telephone service. Ooma itself doesn’t provide 911 service, it just doesn’t prevent a user from using 911 that is already available. 911 is a paid service where the customer pays a monthly fee (usually) to have 911/Emergency service. If a Ooma customer doesn’t have local telephone service, the customer has Ooma service, but has no 911 service. Is that correct?

    When you do an apples-to-apples comparison,

  2. Don’t overlook this from Ooma’s website. After the mumbo-jumbo slight of hand about accounting and Apple et al. comes the real info – you’re getting 3 yrs not lifetime service. Then more nonsense about future customer plans with no mention of Oomba’s plans on what they will charge Day 1 of Year 4!

    We are required by accounting rules to estimate the service life of our products. This is NOT to suggest that we expect our well-crafted, brilliantly engineered ooma devices to spontaneously combust or break down when the three years are up. Quite the contrary. Please understand that we have selected three years because it is consistent with the Apple iPhone™, TiVo®, and other similar devices. Customers who purchase the ooma system at the special introductory rate of $399 for an ooma Hub device will get at least three years of unlimited calling in the US and other premium calling features using the ooma system without monthly fees. Of course, customers may choose to upgrade their ooma devices or decide to add-on services before the three years are up, while others may be content to keep their original devices much longer than three years.

  3. Skype is more hype, I see skype as another yahoo messenger, you can im, you can voice chat and yes yahoo can now place regular calls even txt mobile phones. Oooma works like a traditional service (skype does in some way too) but ooma is more for placing regular calls and acting as a landline I’m very excited about it..and I’ve had more than enough experience in VoIP used, packet8 from day 1 till now and have * pbx set up so …I’m excited :) …399 for a lifetime phone pshh no problem my treo cost me more than that when I first got it and my monthly bill on that is still over $100

  4. Skype Pro is now available in the US which includes Unlimited Calling and 50% off every time you buy or renew a SkypeIn number. That’s only $66 a year!

  5. I’ve just ordered ooma after using Skype for the better part of a year. While I like the concept of Skype and will keep using it, I’m hoping that ooma will have better sound quality than Skype. Skype often has problem with key presses being correctly ‘heard’ by voice mail systems, with really spotty voice quality, and occasional system collapses.

    I’ll test ooma out hard for the 60 day trial period and if the quality isn’t SIGNIFICANTLY better than Skype, I’ll send it back.

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