ooma Telo vs. magicJack

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ooma Telo vs. magicJack

Rich met with ooma recently to see their latest wares and hear about their current business model. Recently, ooma ditched the 'P2P voice network' idea where users actually "share" their home landline with others and instead became a traditional VoIP broadband provider. Apparently, the privacy issues were too much to overcome, since users were concerns about fraudulent activity happening on their home landline by outside ooma users. I had my own reservations about the business model as well, since they claimed it would take 2,000 strategicly placed ooma boxes in all the various local exchanges to get good local call coverage for free P2P calls.

Besides becoming a traditional VoIP broadband provider, ooma is now going to start offering high-end media phones, that according to Rich Tehrani will in the future feature a picture frame, in-house sensors and cameras. As for what they offer today, in early January, ooma launched Telo, which offers unlimited, free VoIP-to-PSTN (U.S.) calls over the Internet along with a DECT 6.0 cordless phone that supports call screening, MP3 ringtones, 12-hour talk time, HD voice, speakerphone, two-line support, mobile transfer, and intercom. It supports up to eight phone numbers and six phones

                   ooma's Telo phone system with DECT 6.0 handset.

The Telo phone system is expected to be available in the first half of 2009. The next question you're probably thinking is "If it's free unlimited U.S. VoIP-to-PSTN calls, how does ooma make any money?" The answer to that is ooma offers ooma Premier, with advanced features that they hope people will opt & pay for. (See: http://www.ooma.com/company/how_we_make_money.php)

Some of the Premiere features include:
  • Instant Second Line allows you to make or take two simultaneous calls from a single phone number
  • Blacklists helps you protect your privacy and block telemarketers
  • Multiring lets you answer calls from your home phone or cell phone
  • Message Screening allows you to listen in as the caller is leaving their message
  • Send to Voicemail allows you to transfer a call to your voicemail
  • Voicemail Forwarding lets you forward voicemail so that you can listen to it from your favorite email program
  • Do Not Disturb allows you to roll your calls into voicemail without ringing your phone
  • Personal Numbers allows you to select additional phone numbers in any calling area in the US
The "free" unlimited calling puts them on par with magicJack, but the magicJack is much less expensive (magicJack costs $39.99 1st year, and $19.99/yr in subsequent years). Pricing for Telo has not been announced, but I'm sure it will be much more expensive since the hardware costs so much more. One advantage for Telo is that magicjack requires your PC to be on all the time to make/receive calls over its USB-based dongle. The Telo phone system is a standalone phone that has no such restriction. It's also a multi-line and multi-handset phone platform, so it's more suitable to busy households that require multiple lines or phone handsets.

Check out Rich's post for more on Telo and how the FCC is actually an investor in ooma.

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