Thursday, February 26, 2009

Telephones over the Internet, a Skype vs Gizmo5 comparison

Engineers are always trying to optimize value - sometime's we choose the wrong values to optimize on, but thats a discussion for another day. Recently, I've been looking through different VoIP services to see how viable they are as ways of augmenting or replacing my residential land-line phone service. VoIP is Voice over Internet Protocol. The per-minute prices for VoIP are free-to-low, with direct computer-to-computer calls typically free and computer-to-phone service typically at a low monthly or per-minute fee. A computer-to-phone call is often called PSTN or Public Switch Telephone Network termination. There are also other variations on this where you call and the service calls back but, for me, those services are more hassle than they're worth.

VoIP phoning isn't as reliable as regular landline phones. e.g. in a power outage, you have to have your own backup to run the computer or other devices needed to connect to the internet -- and even that is futile if you net connection goes down with the power. Between the power and issues about getting correct 911 service, etc, VoIP is something I see as a way to augment my current service by reducing cost for non-emergency calls.

So far, after looking through a number of different options, Skype and Gizmo5 are two services of interest. They break up their costs in different ways, and there are various technical and market aspects that might make one favor one vs another. For example, I like that Gizmo5 uses standard communication protocols to initiate and transfer calls while Skype uses more proprietary methods. They also both offer other services that I wouldn't use very often, such as video chat.

Incidentally, one thing that both work with is my Ipod Touch 2G. An Ipod application called "Fring" allows calls over WiFi using a number of VoIP services. It's a geeky feature to play with but there constraints there that make me think that this won't be the way I put the most hours on a VoIP service. More on that later maybe, but I'll just close out talk of Fring with the statement that it's use of standard protocols such as a SIP VoIP interface is what allows Gizmo5 to work with Fring. This is one reason to like standards

As of this writing, both offer service-to-service calls for free. So really I'm comparing the cost of making computer to phone calls. Gizmo5 offers bridging calls to Skype for a flat fee for time. This seems somewhat unreliable, presumably because Skype doesn't encourage this. Skype has a larger user base, but is owned by questionably consumer friendly Ebay (also owner of PayPal).

In terms of flat rate service, Gizmo5 offers 1.9 ct/min rates while Skypes are 2.1ct/min. Skype also charges a connection fee of 3.5 cents. So for flat rate service Skype loses out pricewise. Skype, however, also offers unlimited calls for $2.95/mo. So the breakpoint is ~155minutes for Gizmo5 vs skype. Meaning if you plan to consistently use more than 155 minutes a month on a service like this then Skype will be cheaper. Since this is an addon side service, I think I'm going with Gizmo5 - I liked their use of open connection protocols anyway.

Since I first wrote this post the LA Times ran an article on a study citing the average cost that consumers pay for cellular service -- over $3 per minute wow...

(photo by: asdelwood, under a Creative Commons license on Flickr)