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Ooma Telo Review – Save Hundreds on Your Telephone Bill

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I recently bought an Ooma Telo, which is an inexpensive Internet phone system. I thought I would share a review with you to share what it is, how much you can save with it, and why it’s a great option for many people. But let me start at the beginning.

Last week I received my most recent Internet and telephone bill last week and I noticed a small price increase. It was only about $8 higher, but I wanted to see what the difference was, so I called the customer service rep. She informed me that the teaser intro rate on my cable telephone service was increasing and that was the prorated amount for the coming month. $8 didn’t seem too bad, until I noticed it only covered a small portion of the month. It turns out my telephone rate was ballooning to $40 per month! I knew the $5 a month I had been paying for the last year was too good to be true, but I didn’t realize that the normal rate was $40 a month. That’s simply too much for how much I use my phone, and for the basic features I was receiving. (and yes, I tried negotiating, but to no avail!).

I know several people who have different Internet phone services, so I asked around and the reviews on the Ooma were overwhelmingly positive. There are dozens of VoIP options (Voice over Internet Protocol) available, but the prices, features, and quality vary. After reading a couple dozen articles and reviews, and speaking with a few people, I settled on the Ooma Telo.

Ooma Telo – How it Works

Ooma Telo Review - free home phone service

This little box can save your hundreds!

Ooma is an Internet telephone system that plugs in directly to your modem. It works with virtually any phone, and you can also add other features, such as Bluetooth to work with your cell phone (premium feature), voicemail to text, and other features. It’s incredibly versatile, and more importantly – it’s dirt cheap.

Here is the most important thing: you don’t need to connect it to a computer for it to function. All you need is a high speed Internet connection. Several other VoIP products require you to be logged on to your computer while using it, which is a pain (this is one complaint about MagiJack). The Ooma Telo only requires a high speed internet connection and a telephone, and you are good to go.

How Much You Can Save with Ooma?

Ooma advertises itself as a free home phone service. All you do is buy the unit and pay applicable monthly taxes and regulatory fees. That’s it, no monthly payments or other recurring fees unless you choose to purchase add-ons like the Ooma Premier, or any of their other tools. Some of them are useful though, so don’t discount the idea without looking at your needs first. Here is the Ooma page to determine your taxes by location. Here is how much I would pay, based on my location:

Ooma tax calculator - how much will you pay?

You only pay taxes and regulatory fees.

Based on a monthly cost of $4.77, I would pay a total of $57.24 a year in taxes and fees. Add the $40 fee to port my old number, and the cost of the unit ($132.40), and my first year will cost me a total of about $230. Or just less than 6 months of telephone service from my current provider. Here are my total costs for an Ooma compared to my current provider:

  • Ooma year one: $230
  • Ooma year and two: $288
  • Current provider year one: $480
  • Current provider year one and two: $960

My savings for two years of service will be $672. (it will actually likely be more, considering I am not accounting for the applicable taxes with my current provider; if the tax rates are the same, then my savings over two years will actually be closer to $785 – the cost of my current provider minus the cost of the unit and the cost to port my number).

Any way you slice it – this adds up to serious savings!

You Can Keep Your Old Number (or get a new one)

One of the best features of the Ooma Telo (besides saving money!) is the ability to keep your current telephone number. It’s a pain to get your new number to your family, friends, business associates, or anyone else who needs to get in contact with you. The cool thing is that once you get your number into the Ooma system, you can keep it there as long as you are an Ooma customer. That means you can take your number with you whenever you move, regardless of whether you move across town or across the country.

You also have the option of choosing a telephone number outside of your current area code when you sign up for your account. When you register your Telo, you are asked to choose an area code and city, and you will be given a selection of numbers to choose from. This can be a good way to choose a number for an area where you have a lot of family or friends so they won’t have to call you long distance, or if you are planning on relocating in the near future.

How is the Ooma Telo Call Quality?

I didn’t notice any difference in the call quality based on calls from my current landline, and the quality is much better than my cell phone – though that isn’t saying much because I get poor cell phone reception in my house. I haven’t used any of the premium features, so I can’t say much about those. The one I am most interested in checking out is the voicemail to text feature. But I rarely get voicemail, so it isn’t a feature I would use frequently, so it isn’t something I am interested in paying for at the moment.

Over all the ease of use, the quality, and the monthly and annual savings made this a no-brainer for me. After I ran the numbers, there was no way I could convince myself not to buy it.

Where to Buy It

Ooma is available online and at a variety of brick and mortar stores. The list price is $199.99 for the Ooma Telo, which is the model I bought. But you can always find it at less the list price. For the last few months, the standard was right around the $149.99 range, with discounts available from time to time. I bought mine from Amazon on Black Friday for around $135, including shipping. Costco also carries it and has good deals from time to time (unfortunately, their online deal was sold out when I tried to buy it there). Keep in mind you need a Costco membership to buy it there.

My Thoughts on Ooma:

Overall, I am very happy with this purchase. $40 a month for a landline is an obscene price to pay considering the numerous options out there. Had my Internet provider simply raised my monthly subscription to $10 or maybe even $15 a month, I wouldn’t have bought an Ooma and moved my business elsewhere. But there is no way I can justify paying $40 a month when I can get a very similar service for less than $5 per month, or around $15 a month if I want to go with the Ooma Premier.


Published or updated December 1, 2012.
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{ 9 comments… read them below or add one }

1 Jarhead

I use Majic Jack for my home phone. If you get the majic Jack plus there is no need to hook it to a computer however you have the option of taking it with you and using it with a computer. A good option if you are going to be travelling and want to carry your home or office number with you.

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2 Ryan Guina

The ability to take your number with you is a great option for those who travel a lot. That would work well for me, since I travel a little bit. I should have looked into that option a little more! (though the Ooma does have call forwarding as one of the Premier features, so I can always pay for the Ooma Premier and forward calls to my cell phone when I leave home).

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3 Lena @ WhatMommyDoes

I’ve been waiting on your Ooma review! The cost breakdown is extremely helpful for me because that’s exactly how I analyze the pros and cons of changing services. I’m convinced Ooma is the way to go; however, I just need to figure out what I’ll need to do to keep my security system working (it currently runs off our home phone). Not sure I can hook it up through Ooma, but I haven’t had a chance to look into it yet.

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4 Ryan Guina

From what I read, Ooma doesn’t officially support alarm systems. They recommend people keep a basic landline service for home alarms. However, I have read that some people are able to get it to work. Your mileage may vary. My recommendation is to do a little more research and see if it works for you. You might also try some of the other VoIP options out there to see if they work with your alarm system, and can save you enough money to make the switch worth it!

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5 Lena @ WhatMommyDoes

Thanks – I’ll come back here and post my findings if/when I figure out something with the alarm setup.

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6 krantcents

We gave up our landline 4-5 years ago. There are times that I wish I still had it. Particularly when I exceed my minutes. Can you make international calls as well for the same fee?

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7 Ryan Guina

The international calls aren’t free unless they are made to another Ooma user. Otherwise, there is a small fee, which varies depending on which country you call. Here are the international rates: http://ooma.com/products/international-rates

Skype is a good way to make international calls over the computer, but there is a cost if you want to make an international call to a landline or mobile phone when you use Skype.

If you regularly exceed your cell phone minutes, then I would recommend looking into another option. Landlines don’t have to be very expensive when using some of the many VoIP options.

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8 Jynx

Problem with magicjack plus is the dropped call during call, it is not unlimited, it can disconect your call after 90min or so to provide quality of service and prevent abandon call they say, check the condition on site before buying it is not a full conected circuit. Ooma is unlimited just like a landline.

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9 Ryan Guina

Ooma actually isn’t unlimited – they have set limits, but they are extremely high. Basically, Ooma wants to ensure people aren’t using the service for home based businesses like call centers or similar intensive uses. Most people won’t come remotely close to the limits.

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