Phone service from a major carrier makes sense for many households, especially if it's bundled with Internet and TV service at a nice discount. But changing or eliminating such home-phone service can be a practical way to slash telecom bills. If you drop home phone service from a major carrier and use one of the options below, you could save $20 a month or more.
Many homes already have Voice over Internet Protocol (VoIP) phone service from their cable company, Verizon FiOS, or AT&T U-verse. Costs usually run about $30 a month as part of a bundle or about $50 à la carte, including a long-distance plan.
Our Ratings include alternative VoIP services, described below, that cost less—from nothing to about $25 a month for unlimited domestic calls, plus an up-front cost for equipment in most cases. Taxes and fees can add a few dollars a month.
Newer cost-saving choices might suit you, especially if you often call countries with high per-minute rates from major phone companies. Ooma offers international calls to 70 countries for less than a penny a minute. Vonage has unlimited calling to 60 countries for $26 a month. MagicJack and Skype allow free calls to other users anywhere in the world and have low rates for calls to nonsubscribers.
Before you think about dropping phone service from a bundle, see how much that will save you. The cost of the TV and/or Internet services may jump, which will eat into savings. Still, you'll probably pay less using a service such as Ooma with TV and Internet services from a cable or phone company. But you'll lose other pluses to bundling phone and TV service, such as having caller ID info pop up on the TV when your home phone rings.
Note that any VoIP system won't function during a power outage unless you have a backup battery. Also, many home alarm systems require a landline, and some VoIP options might not meet those needs.
About one in four U.S. households now relies entirely on cell phones at home. That requires decent reception. If you get a strong signal in only one room, you can connect your cell phone to a special cordless phone system to pipe calls around the house. One caveat: Another Consumer Reports National Research Center survey found cell phones to be acceptably reliable for 911 emergency calls but not as useful to operators in determining the caller's location.
*Editor's note: The original version of this story omitted the facts that Skype offers its own hardware and that the company recommends supplementing its service with a landline for emergency calls.