A Review of The Ooma VoIP Internet Phone

Ooma is a startup voice over IP service; betting all their chips on the idea of offering a mostly-free telephone system. Since late 2009 the service has been convincing techies that they can save a heap of money on their phone bill: the VoIP equivalent of what Geico is to car insurance.ooma

Do I Really Need an Ooma?

The Ooma targets consumers that want to save money on their phone bills, but don’t want to pay high costs for VoIP services like Vonage users do. Ooma relies instead on the high initial cost to offset the mostly-free price of the VoIP service. A Premier service is also offered at a monthly rate, but isn’t required for basic usage.

Ooma Pricing Details

Ooma is described as mostly free, since you will still be paying taxes on the service. Ooma Telo users will also pay a $12 annual fee after their first year of usage. This amounts to about $20 each year, depending on how your state handles taxation.

Ooma Premier

Ooma offers a Premier service that costs $9.99 each month, or $119.99 each year. Note that you do not need the Premier service to have the Ooma. Major benefits of the Premier are as follows:

  • Advanced Calling – Users will get a second number, a backup number for ringing your mobile phone if you miss a call, and the ability to use Google Voice.
  • Enhanced Voicemail – Do not disturb settings, call screening, voicemail forwarding, and voicemail transcription that will email voicemails to a specified email address.
  • Privacy – Built in blacklisted numbers, caller ID, and ability to block anonymous calls.
  • Promotions – Sign up for the Ooma Premier Service for a year in advance and you will get a free Ooma Bluetooth Adapter, an Ooma Telo Handset, or a free number port. The handset usually goes for about $50, so it’s the best deal of the bunch.

The Verdict

So do you need an Ooma? It depends on the phone services you currently have.

A popular setup: get the Ooma and have a mobile phone put on a prepaid plan. You then use the Ooma for all calls except emergencies. Using this route, you will pay about $10-$20 each month in prepaid dues– and the Ooma pays for itself in about a year.

If you happen to have an iPhone, just download the Ooma app in the Apple store and you can completely bypass your regular expenditures on voice plans. Android users are also getting an application within the next year.

Businesses like the Ooma as well, as it can be written off as a business expense. The Ooma works best in a small business environment since each base station supports a limited number of headsets.

The Ooma Hub and The Ooma Telo – Which to Buy?

So you are interested in the Ooma: now you must choose between the Ooma Hub and the Ooma Telo.

Hub Vs Telo

The Hub is the older of the two models, and looks more like a Charlie’s Angel prop than an actual VoIP solution. But the Ooma Telo isn’t all about looks, as it packs a few more features the Hub doesn’t have:

  • Online Phonebook – Manage contacts over the Internet and have them sync to your Ooma headset automatically. This is great for putting in a lot of numbers at once; complete with names, email addresses, home addresses, and pictures. It’s likely that in the future, the Ooma headset will support picture ID calling and contact organization straight from the headset.
  • HD Voice – The Clear Voice feature that Ooma rolled out is only available to Telo customers. The difference isn’t life-changing, but it is noticeable. The voice quality of the Telo surpasses your average mobile phone, so long as the Internet service plan you have is sufficient.
  • Ooma Headsets – The Ooma headset allows customers to take a phone call anywhere in their home- a great asset for when multitasking. Compared to other headsets, the only major benefits would be the contact syncing, caller ID, and one-touch voicemail.
  • USB Port – The USB port supports Bluetooth technology, so that one may use a number of peripherals with the system.

Looking at the list, you could get by with the Hub and not notice much of a difference. There are a few reasons Hub owners are still smiling:

  • No Regulatory Fee – Ooma put in a $12 fee, to be paid annually, in order to recoup costs on their mostly-free service. This was enacted after the Hub was released, so Hub users do not pay it.
  • Premier Features – Some of the Premier features are free for Hub users. This only includes basic voicemail and caller ID, however.

The Verdict

Most users will still want to side with the Ooma Telo for several reasons.

First, the Ooma Telo is the latest model, and will be the model that receives all of the future upgrades that the Ooma team is working on.

The price difference is negligible. You will be paying only about $20 extra each year with the Telo, and yet you will have all the added features.

It’s true that the Ooma Telo is not completely free like the Ooma Hub may be with basic service. The bottom-line is that it is still $20 a year for basic service, and a little over $100 each year for Premier. Most mobile and landline users will be paying $50-$100 each month instead.

Getting Down To Business – Installation

The installation process was surprisingly simple. You must have a high speed Internet connection, the ability to plug in a few wires, and about ten minutes to spare while the Ooma updates its firmware automatically.

You will then go through the process of setting up a number using their website. You may find that the numbers in your area are extremely limited. For Missouri-based numbers, there were few choices for large cities like Columbia. As a result, you may have to settle for a number that is an hour or two away from your location. (A St Louis number in our case)

Setting options from there is simple as can be- and Ooma will even enroll you into their Premier service for free. Just remember that you will be automatically billed $9.99 each month for the service if you don’t cancel it before the free trial is over.

Quality of Service and Routing

If you have installed the Ooma and have noticed jitter or poor call quality you may have to enable Quality of Service settings, or QoS, in your router.

The manual suggests that the Ooma be put in between your modem and the router to bypass any firewall or port issues. The problem remains that others using the Internet may be interrupting the Ooma signal even when doing this.

Newer routers such as the NETGEAR WNDR3700 will have the ability to assign the proper QoS settings to each device on your network. Be warned– this is not for the technology impaired. If you aren’t sure what a MAC address or IP address is, you will need help from a tech savvy friend. Luckily, the Ooma forums have helpful threads to show you how to conduct the changes yourself if you aren’t opposed to learning.

Also search for a router that has dual-band technology. The NETGEAR WNDR3700 is about as good as it gets in throughput, speeds, and QoS. Expect to pay around $130 for this kind of routing power.

Beware – You Are At The Mercy of Your ISP

The Ooma VoIP system can only function as well as your Internet connection allows it to. You will need an Internet package that can support a high upload and download rate to account for the VoIP traffic, in addition to other traffic that will be on the network.

Some ISPs will not prioritize VoIP traffic. Mediacom, a popular ISP, has been known to do this. Just know that when network congestion reaches its peak you may not have perfect call quality as you might with other ISPs. Having the proper router and Internet package will circumvent any shortcomings of non-prioritized traffic.

Post-Install – Investigating Ooma Features

One of my favored features of the Ooma is that the online web panel is so easy to use. Whether you need to track a call down or listen to your voicemail with the click of a mouse, it’s all here.

Ooma went a step further and integrated some fun statistics. You will be able to see a favorite callers list, total minutes spent talking, and total number of calls. Now all that is left is to add achievements. (Sorry, non-Xbox readers- you’re out in the cold on this one)

The online Rolodex is also a life saver for when you need to keep track of personal contacts, business contacts, and all the rest. The fact you can sync all the data to your headset automatically is a huge time saver.

Will Ooma Go Out of Business?

There is a large concern that the Ooma company will go out of business. If offered the ability to not pay for phone service- a lot of people won’t.

The fact remains that the Ooma brand has over $100 million in funding capital to support it. They boast well over 100,000 customers- and they recoup their costs through selling the Ooma Premier service.

Ooma Telo users also pay a $12 fee on an annual basis to recoup costs, giving the company an extra padding for those who don’t use the Premier.

You can buy the Ooma today it will pay for itself within a year. If the Ooma company ever did go out of business, you would have long recovered what you paid for it.

It’s simple: it’s possible the company will go under, but it won’t happen any time soon. The company is rolling out new features constantly, from phone apps to new phone services. They haven’t lost their steam yet!

Closing Comments – A Personal Account

I’ve put the Ooma to work for the past month. It’s handled all calls exceptionally except about two weeks into my service. I had to buy a new router and install the proper QoS settings to ensure the Ooma was getting the priority in all Internet traffic. Problem solved!

The handset can be clunky. It’s slow to react when pushing buttons- but if I had to make the decision once more, I’d pay for it again. The syncing feature, the one-touch voicemail, and the ease of use are all features just too beneficial to ignore.

The Telo system is just aesthetically impressive. It always gets compliments when visitors come over. And of course, I get the same compliments when I call out and the second party can hear more than just my voice– but my actual tone, hue, and pitch.

I believe it to be a solid purchase decision and I’m well on my way to paying it off in saved mobile expenses.

There Are 11 Responses So Far. »

  1. Fantastic write up you have here! Found this through StumbleUpon. Always love a few stumbles in the morning, with a cup of coffee. 🙂

  2. Great article! I’ve been looking for something similar to an Ooma, but the devices I’ve seen have been slightly more expensive or didn’t provide as many features. I’m going to check out their website and probably order one. Thanks for the info!

  3. I’ve been using the Ooma for about two weeks now, as a result of buying it after seeing this review.

    I’d like to thank you personally. It’s a wonderful machine, and I’m glad to only pay $3/month for my service. Most other Ooma reviews were bias, so I appreciate the writer keeping things neutral!

  4. I thought I had searched far and wide to find the best voip… but this FAR surpasses it! Thank you!

  5. Wanted to compliment the well written and through review. Am considering the Ooma, and am so tired of bias and spam “reviews”, that blast the Ooma (usually from folks who cannot spell or use words correctly) or say “Buy Ooma NOW!”, and “Get the Ooma”… review my a**.

    Am a retired programmer and Network Engineer and one of the “inventors” of the Net – helped test and polish email in the late 70’s – early 80’s while a University academic.

    Kudos on the clear, concise, and informative review. Not only has it made up my mind, it has introduced me to what looks like a really decent website to recommend to friends who want to “roll their own” network setup.

  6. thanks, the best info that i found out at google about OOMA.

  7. I really like the review, & was still in debate but I was already planning on this over: Skype(needs a pc on at all times), MagicJack(same as skype), & Vonage (expensive). Compared to at least $40/mo through Verizon for phone, it was already an upfront decision.
    People have to remember however that, like you stated, requires a pretty decent/fast high-speed connection.
    A very good article… however, the only thing that I thought that it lacked was what your internet speed was for the review. I personally have (up to) 7.1 Mbps (Megabits, not MegaBytes), which I pay roughly $50/mo for, so I could easily set aside 3.0 Mbps for the Ooma, for probably very good quality.

  8. I feel the price tag is way tooo high and there are many other more viable options out there than this product. I am sure it prob works well as people attest but financially when compared to other options it is not what it is supposed to be.

  9. Steven Q’s comment makes no sense. I recently bought an Ooma, yes initial outgo is more then other VOIP solutions, but $4 a month is less then 10% of my previous monthly bill for phone service. It is starting to pay for itself already. Yes your internet connection does make the difference. Obviously if you don’t have or cant get a good fast reliable connection you will have issues, though thats true of all VOIP solutions. I am glad I switched.-A

  10. I think it is important to note that if you do not currently have an OOMA account, that OOMA changed their terms and conditions on April 5 2010 which means that HUB users will pay the same as TELO users.

    If you buy a used HUB or Telo, you will pay an $80 reactivation fee, plus a $40 port fee if you want to keep your phone #. In my area on both the HUB and TELO I have to pay $3.47/month for basic service which is $41.64/year and not $20. Still very cheap when compared to a normal land line, so still a good deal. My point is that the pricing has gone up quite a bit and I suspect that their prices will continue to rise.

  11. I don’t own one. I have a Magic Jack which sucks pretty bad. Ooma charges $3.50 taxes and fees which Magic Jack doesn’t. This seems odd. If Magic Jack doesn’t have these taxes and fees, why does Ooma? Looks as if Ooma does the same thing a regular phone companies by nickel and diming you to death.

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