Saturday, November 29, 2008

Shop and Compare International Calling Plans

The holidays are fast approaching and many people will want to call family and friends in far away places. Many people who make international calls infrequently will be shocked when they find out how much their home phone or mobile phone service provider charges for making international calls. The total cost will include a high per minute rate charged by the service provider and additional taxes and fees levied by the government. Large phone companies like AT&T and Verizon offer lower cost international calling plans but even the rates they charge under these plans are outrageous when compared to other low cost options for making international calls.

Many consumers have turned to VoIP providers such as Vonage in order to save money on international calls. This may be a good choice if it is purchased as a replacement for home phone service but it is not the best option for international calling. Vonage includes long distance service to Canada, Puerto Rico, Ireland, Italy, Spain and the UK with their basic service but calls to these locations are typically very cheap. Vonage also uses VoIP technology so international call quality tends to vary from good to poor. Vonage may seem like a good deal but it costs $24.95 per month and a long-term contract is required. International rates are also relatively expensive when compared to other low cost options.

Other consumers, especially techies, save money by making international calls with PC to Phone providers like Skype. This can be a great option since Skype features free PC-to-PC calls. However, in order to make free calls, each party needs to have a PC, an INTERNET connection, and have a Skype account. Many people live with these inconveniences and make free calls with Skype. However, many others want an international calling plan where they can call landlines and cell phones. Skype can be used to make calls to phones but it is inconvenient since a PC and INTERNET connection is required and it is not as cheap as other, more convenient options.

One option for making international calls that is convenient, flexible and low cost is prepaid long distance. These virtual calling plans evolved from phone cards but they have become more sophisticated. Most come with free user accounts where callers can monitor activity (even the details of each call) and make account changes. They also typically have other features like PIN free dialing and speed dial so they are more convenient to use than standard phone cards. A few of these prepaid international calling plans offer high quality and low rates on calls to almost any location in the world. We are very familiar with two of these plans, Tel3Advantage and Continental. We have used both of these to make low cost international phone calls for several years. Tel3Advatage is an especially good calling plan that features high quality connections and rates that beat Skype’s PC-to-Phone rates to many locations. Both Tel3Advantage and Continental are virtual prepaid calling plans that do not require a contract or other long-term obligation. They also do not charge an activation fee or any fees for maintaining or terminating an account. They are both ideal calling plans for short-term use over the holidays or long-term use all year long. Either one of these prepaid calling plans are a good option for consumers who want to save money on long distance calling and still want convenience, flexibility and high quality.

For illustrative purposes, the Table below compares the rates charged by these calling plans to some popular international locations. These rates are in cents per minute for calls made from the USA. They are the rates advertised on the service provider’s website and may not include all fees and taxes. They include rates from two traditional international calling plans (AT&T and Verizon), one VoIP provider (Vonage), one PC-to-Phone provider (Skype) and two prepaid long distance provider (Tel3Advantage and Continental).

International Calling Plan Rate Comparison

Calls Originating in the USA (cents/min)

Location Called/Service Provider

Vonage

Skype

Verizon Choice Plan

AT&T Int’l Plan

Tel3Advantage

Continental

Egypt

21

18.5

35

35

14

19.6

Germany

5

2.1

10

9

2

6.5

Ghana

13

15.3

45

45

7

11.9

Jamaica

20

12.6

38

36

9.5

12.1

Mexico

8

2.1

8

9

2

6.4

Nigeria

11

11.7

52

52

11

10.7

Philippines

18

19.8

16

16

12.5

16.9

Moscow (RU)

7

2.1

15

16

1.5

6

Conclusions

The above table illustrates a few things:

  1. International rates vary significantly between companies and countries. It pays to shop for the best deal to the locations you call the most.
  2. It is not hard to beat the rates on international calls offered by the traditional long distance providers. They are not even trying to compete on price.
  3. Skype provides free PC-to-PC calls. Their rates to landlines or cell phones are low but not the lowest.
  4. Vonage may save consumers money on home phone service but their international rates are not cheap relative to the competition.
  5. Consumers who plan to make frequent international calls should consider using a prepaid long distance provider like Tel3Advantage.

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