It is tough to impress me when it comes to home telephone systems… I have seen it all or at least I feel I have. Covering the telecom space as long as I have, I figured there are few innovations I haven’t seen. That was until I took a train into Manhattan to see the execs at Ooma to learn how they are evolving their Telo home phone system to do more and more. Over a year ago I proclaimed this is a phone system that Bang & Olufsen could have designed and I am still impressed with the way it looks.

But more important than the aesthetics is the inside of the system which boasts the open-source Linux Freeswitch telephony operating system running on a 450MHz dual-core ARM processor with 1GB of Flash and RAM.

Why do you need all of this horsepower? Well, the company is looking to advance the entire home user telephony (and eventually computing) experience and having more horsepower in the home helps in this regard. How? Well, Ooma offers a wire speed router so customers can put the device as the root of their network without slowing down their Internet access. This allows them to guarantee that voice traffic receives adequate priority to avoid any voice quality problems when your home network is busy. In addition, this horsepower allows new features to be added without impacting the core functionality of providing high-quality voice telephone service.

Perhaps the simplest feature is a USB port and nowadays, having one is not such a big deal. But since there is one in the device the company decided to use it to offer a Bluetooth dongle which I saw last week. It is the size of a quarter or so and allows you to connect up to seven devices to your Telo. Some of these can be headsets but what is really innovative is the ability to pair cell phones so you can use your home phone system as an extension of your mobile phone.
 

I have heard from many people that the mobile phone will crush the home phone business and to some degree it is. But the reality is that somewhere between 20-30% of households have poor or no cell phone service. Now if your Telo is located in an area where your cell service is strong you can just power it up near the Telo and have your mobile calls follow you throughout the house to a total of four Ooma handsets.

In case you are wondering, your calls will be answered by your mobile service’s voicemail if there is no answer on the Telo. According to Tami Bhaumik, Vice President of Corporate Marketing at Ooma and Dennis Peng, the company’s VP of Product Management, this new bluetooth feature is a step in an evolving platform. More specifically, the company’s promise is make the home phone experience relevant. I say it is not only relevant but better.

I have had a few people tell me that they don’t need a landline but when I ask them how long their iPhone or other battery lasts they tell me five or six hours. On a good day mine only goes five hours with moderate use. It is for this reason that after kissing my family, plugging in my phone is my next highest priority. It is tough to see how a phone which I have attached to a power cord in one part of my home can help me as I run around my house. Have you seen the length of the iPhone cord by the way? I swear Steve Jobs is taking revenge on the world for something – I am just not sure what. For me, the Ooma solution with Bluetooth gives me the enhanced flexibility of charging my mobile while not missing calls or having to grapple with a phone plugged into an outlet which will not reach my ear while standing.

Getting back to the comment about relevance, Ooma has given the Telo the ability to sync up to 1,000 names from your address book whether in Microsoft Outlook, Facebook or Google. In addition, you can use an iPhone app which is soon to be released to take advantage of the low international calling rates Ooma offers. Interestingly this solution will use VoIP using as little as 30 kbps of bandwidth whether you are using WiFi or not. This means you don’t use up your mobile voice minutes when using Ooma’s mobile applications.

Using the $9.99 iPhone app, Ooma Premier customers get 250 free minutes for US calling and then pay 1.9 cents per minute. Non-Premier customers pay 1.9 cents per minute from the get go. The company hopes to roll out software for other platforms soon as well. Expect Android and RIM devices on the short-list.

The company also allows SIP software to interface with the device so if you are a CounterPath or Google Voice user you can leverage the best of VoIP clients with you home phone service. There is deep integration with Google Voice allowing call screening and easy access to Google Voice voicemail.

The company is doubling down on its customers by extending its customer service hours which are now 7 a.m. to 7 p.m. PST on weekdays and 8 a.m. to 5 p.m. PST on weekends. As a person who has personally received customer service calls from a variety of VoIP providers on weekends, I can tell you how important this is. Why do I receive such calls? Many of my blog entries rank high for company names and people call me out of desperation. Let’s just say that more people bank their companies on sub-thirty dollar phone solutions than you may think.

And this is the reason that a small company and home user should take into account the service behind the phone service you bet your company or household on. You generally get what you pay for.

Ooma has competition coming from a few areas. One is cloud-based providers where the service is offered remotely and the hardware is pretty basic. More competition comes from wireless carriers with femtocells designed to improve the coverage in your home. Then there are triple-play providers in the cable space who are doing lots of marketing but not so much innovation in the telephone department.

Where Ooma has really differentiated itself is its evolving platform which has a tremendous focus on voice quality, providing HD voice and moreover is adding features all the time. Over 100,000 customers have chosen this service so far and I think you should look at it seriously when making a choice about your home or small business phone. Yes there are lots of different ways to provide basic telephone service but what is fascinating about the Ooma Telo strategy is they put a phone system whose software can power a carrier into your home. As the company continues to add more functions it becomes that much more valuable and differentiated.