Reviewed by: Mordy Gilden
Reviewed on: 12/23/2009 4:20:50 PM

Pretty Cool

What It Claims To Do: The Ooma Telo touts itself as a revolutionary device that allows you to make free nationwide calls without any monthly fees. The website claims low rates for international calls, easy setup, as well as other features you'd expect like voicemail, the option to port your old number and 911 service.

What We Found: Well, you guys told us you thought this was too good to be true. So at your suggestion, we tried the Ooma Telo for ourselves.

The Ooma Telo has an additional phone jack on it to support a back-up phone line. In other words, if you're not yet comfortable switching to an internet-based phone line, or need a non-internet based phone line for your alarm system or fax machine, the Ooma can work in tandem with your old phone line. This would allow you to choose the cheapest available landline option while saving on monthly fees through the Ooma. That's nice.

The setup process was pretty standard and straightforward... until we got to the part asking for our billing information. We thought the Ooma was supposed to be free after we paid the initial $300 for the device. Here's where it gets tricky: Ooma offers an upgraded service known as Ooma Premier, for which they charge $10 / month. Your Ooma Telo comes with a free 60-day trial of the Premier service, but if you forget to cancel, they will start billing you for the service when your trial is up. Some of the features allowed by Ooma Premier are: ability to check your voicemail remotely, send voicemails as email attachments, three-way conferencing, call-forwarding, and creating a custom voicemail greeting. We had to admit - some of the services that are included in the Premier are services we would have expected to have included with the standard Ooma.

We were also surprised to see that there is an annual charge of $11.75 for taxes and fees... and that the amount is subject to change. Small as this payment is, we felt somewhat duped.

A nice feature: you can plug the Ooma directly into the houses wiring to make all your phones work through the Ooma.

The Ooma has a funny little dialtone to let you know you're using Ooma as opposed to a landline. The sound quality was very good, though the quality you get will be dependent on your internet connection speed.

One question that haunted us though - what if Ooma goes out of business? Is the Ooma worth the $300 if I don't know how long they will be around? After some quick calculations, we realized that you can make back your initial investment in 10 months. We assume that Ooma will only continue to make enough money to survive if people sign up for the Premier service, and therefore, they are at risk for going out of business at some point if the Premier service does not take off. However, as we don't have any real reason to believe that Ooma will not be around in a year, and that in just one year you'll have made back your investment, we still think this has the potential to be a pretty good buy.

The Bottom Line: Overall, despite the small disappointment of having to cancel the free trial, and the surprise of the annual fees, we liked the Ooma. It had a good sound quality and nice features. We can't say you will have free phone service forever, but if Ooma is still around in a year, you will have made back your initial investment.