What’s the scoop with “free” VoIP?

Free VoIP Typically goes after the mass market. Low-use residential users, event based one-time applications and even conferencing services. Some of these are ad-based while others are looking to grow a limited service into a more fully featured 4-pay option, and some (like some free conference calling) are borderline scams.

For companies trying to hit the market relying on the residential space for their growth, I wish you well. It is a crowded market. The real value and money is in business services. Businesses are willing to pay for something that works and provides a business benefit at a reasonable price.

The Residential and ad-based models are fun to play with and I would say the Google Voice product is actually useful, but none of these really fit well for business use. I agree with Alok, "Free VoIP" is possible, but who will bet their business on it?

If you do it right, offering Free VoiP is just a marketing tool and indeed it is not free. It is a sales trigger.

Offer something for free and all other optional things need to be paid for.
Make people crazy; just like with all other products + services.....

We do the same. Check out http://www.xeloq.com ..... why not?

The REAL business reader / user understands they need to pay for the right service and support which we of course deliver form day 1 we started our business as VoIP provider servicing 100 resellers in 32 countries. And they do and well respect our services and support...

Just follow us on Twitter to get more inside information: http://twitter.com/XeloQ_voip

Now back to work to get more customers in with FREE triggers.....

Have a nice day !
Milko van den Wollenberg / XeloQ Communications Internet Telephony

As wrote by other specialists, the business of free voip services isn't a concrete business but a way to promote parallel and linked services/products.
I did an experience in 2005 with a free voip service that was only a cost, but, with this instrument I have obtained some visibility and requests from prospects to implement similar services and products.
The discussion can be extended to some example in the internet services like youtube, twitter, skype, linkedin, etc.
All of these initiatives haven't generated direct business and some of these had problems to pay the costs.
But if a free service is built like a driver to promote a real business it can be a success.
I think that this projects are expensive in terms of marketing because a free service have to reach the right visibility without became one similar to many others services available.

My conclusion is that is hard to implement a low cost free service like a driver to do business.

Daniele Cardesi

Several years ago it was said that in telecom there is a race to zero. It looks like we made it. To answer your questions, no. A company cannot survive providing something for nothing. If a company was able to offer their services for free it would go bankrupt before you would be able to have a long term relationship.
As others have stated there are companies that offer “free long-distance” when purchasing their other services. Other providers offer “free this” or “free that” when you purchase their services in a bundled offering. The best advice is to read very carefully all of the T’s & C’s (terms and conditions) before signing any agreement. Get the service provider to guarantee in writing what all of the taxes, surcharges, and fees will be. Also, if possible get a “not to exceed” figure in writing for all monthly services.
Another comment that is made in telecom is that everyone gets the system they deserve. If your goal is a free and low cost service you can and will get everything that comes with that service. If you value the voice connection to your customers/clients and want high voice quality then there will be a price for that service. Only you can determine what is important for your specific business. Good luck in your search.

Free VoIP is a myth. Every business needs to make money at some point. Many businesses have found that they can provide something that's perceived as free, such as Google's search engine, but there must be some revenue model in place to make the business viable long-term.There were hundreds, if not thousands, of dot-com businesses that learned you eventually need a revenue stream. As big of a fan as I am of Twitter (www.twitter.com/bilmoore), Twitter has realized it too needs revenue... it has not determined how to do that and has had to instead rely on funding. But without the revenue, the funding will dry up sooner rather than later.

So to provide "free" VoIP, companies are using ads to pay for the service, similar to Free411. Many vendors are trying to tie somebody into their service by providing free service and then hoping users will upgrade to a paid service plan. For a residential service, some people may find this acceptable, but I've never talked to a business owner that would find this acceptable in their business. Even if they could get apparently free service, they would be placing the future of their company on the equivalent of a street-side vendor... you never know what days they'll show up or what guarantee of service you'll get.

Before business owners consider using a "Free" VoIP service, they should ask themselves this: If somebody asked you to provide YOUR service for free, how much effort would you put into it and how long would you do it for?

Strangely enough, most "free VoIP" services actually do generate revenue in some way. Advertising was mentioned and is certainly one method (although this is a slipper slope, because you can't effectively control the length of the call, so the relative revenue from the ad withers away as the length of the call increases. Another common tactic is "calling area arbitrage", meaning that they give away calls to one area and make money by charging for calls to other areas (i.e., free domestic calls and cheap--but not free--international calls, or free "on-net" calls and cheap "off-net" calls). And yet another approach is to make money by charging other carriers to call their subscribers--this is how all the "free" conference calling services work (although changes in FCC regulations and tariffs have significantly reduced the viability of this method in recent years).

Having said all that, several people have noted that "free" VoIP is possible but "good free" VoIP is not. That is clearly the case, regardless of the approach. A combination of relatively thin margins and a general lack of ability to control end-to-end call quality (because "free" almost always means "no real network infrastructure"), means that users of these services typically don't get good (or any) customer service and have to settle for a "use at your own risk" grade of service. Maybe that's OK for a couple of friends that want to have a free/cheap personal conversation "across the pond" (and who are willing to accept the low reliability and quality in exchange for saving money), but if you have a need to rely on service availability and quality, it's not going to come from a "free VoIP" provider.

Going through the process of launching a new VoIP Service (with mobile functionality as our differentiator) www.cheapintlcalls.com, I cannot see how anyone can survive in the market giving services away.

Not only is there the actual cost of running the business (someone has to pay for the servers and the minutes used), but the support cost would be enormous, unless of course it is a "bedroom exchange".

Users are always looking for the cheapest deal and do not seem to appreciate what is required to set up a carrier grade system. Further, the more they get for nothing the more they expect, voice mail, call forwarding etc.

I am yet to identify a business model other than "massive client acquisition and then be bought", that works in the VoIP market.

The market is extremely competitive for those who DO charge which finds them moving into questionable business tactics / ethics. We only have to look at the scandals over the last two months with major calling card companies taken to task for not providing all of the minutes entitled under advertised and widely published plans.

When we investigated the market for software and services, we were horrified yet morbidly amazed of the functionality written into applications to "dupe" customers. Automatic hangups, random disconnects and roundings, Ramping minutes to name but a few.

When you see this in the carrier grade software it is obvious how "corrupt" the ethics of the market have become. That not withstanding, a lot of this is driven by companies now trying to compete with those who offer "free" VoIP services.

How long can they stay in business and is it fiscally responsible in this day and age to trust your telecommunications to someone without a revenue model.

I have been involved in VoIP on and off for about ten years, I have never seen anything Free in the internet be successful, eventually you have to charge.

Even Google started off free search, then free email, but look at their REVENUES. A free voip service needs to be getting revenue from somewhere to survive, the question is where?

I find unlimited plans are often confused with the word free. In the past, calling over long distance was subject to per minute long distance fees. Now, with the addition voip pbx server clouds, when you subscribe to a network you can have unlimited (free) long distance calling between users on that network. Skype is an example of voip cloud service which includes unlimited long distance, but the skype service lacks new, IP communication, features for business, such as: Virtual office, Unified Email, SIP and Hosted PBX. For business, to call clients with traditional telephone numbers and leverage a hosted business phone system with conferencing and attendant services, you are better off with an reliable hosted pbx provider service such as OctopusIP. http://www.OctopusIP.com/hosted-pbx-server OctopusIP VoIP accounts for business include options to make calls using traditional desk phones, IP Phones and mobile smartphones. Please visit the OctopusIP website if your business can take advantage of lower monthly phone bills and unlimited calling between extensions on your hosted pbx server cloud.