Skype vs. Verizon – Saved me $631.70!

When I entered the real estate arena, I decided I needed to address my phone plans.  My cell phone plan with 1,000 minutes per month was just not going to cut all the additional phone calls I was making – some calls just can’t wait until after 7PM!  Please note that any rates that I provide in this post are based on my home in Amherst, NY.

The two options I considered were having a Verizon land line phone installed, or finding an online Voice Over Internet Protocol (VOIP) service to run over top of my preexisting broadband connection.  I ended up choosing Skype as my VOIP solution.

Skype is a messaging client similar to AOL Instant Messanger, ICQ, or many others that you may come across.  It also comes with a built in VOIP service, with very reasonable rates.  Skype can be found at

Startup Costs: My initial start up costs for Verizon would have been a $130 installation charge.  This baffles me, because the entire house is already wired (and what rooms weren’t wired I would have done myself).  I understand that they have to send a tech out to the house, but this cost didn’t seem prudent.  My initial startup costs for Skype were $40.  I spent $40 on a nice headset to plug into my computer.  Your costs may be higher or lower, but I would suggest a nice headset.  Skype also sells phones that will plug into your computer and integrate with their service, though the cost on these ranges greatly.  There are also tutorials online that will show you how to convert your phones preexisting wiring to a fully functional Skype based phone system.

Service Comparison: For comparison, I am using the same service set for both Skype and Verizon.  I wanted unlimited local and long distance calling to the United States.  The plans I am comparing include unlimited local and long distance to the United States and Canada.  Skype DOES have a fair use policy in effect which limits you to 10,000 minutes per month.  Assuming a 31 day month, this gives you 322 minutes per day of talk time, or over 5 hours of talk time.  I don’t anticipate my needs going over that for quite some time.  Both plans also include voice mail, call forwarding, and caller ID.

With Verizon, I was signing up for one plan which included all the features above.  With Skype, I signed up for 2 separate services – SkypeOut, which provided me with my unlimited outbound service, and Online Number, which provided me with a local calling number for people to reach me at.  Both Skype services were subscribed to at the same time, so there really wasn’t much added “hassle”.

Show Me The Savings:
Now let’s crunch some numbers.  The Verizon plan, after taxes, would have run me $57.60 per month.  This adds up to $691.20 per year!  With Skype, I paid $30 for a full year of SkypeOut service.  I also paid $29.50 for a year of Online Number service.  Total yearly cost of Skype: $59.50.  For $1.90 more, I now have phone service for an entire year!

Figure Skew:
There is some skew to these figures.  I am not including the cost of my broadband connection, because I would be paying for it regardless.  Also, I could have found a broadband and telephone package with Verizon, but overall I’m sure the costs still would have been more than the Skype service.

Quality of Service: As long as you have a solid broadband connection, Skype should work fairly well for you.  I have been using the service for almost a full year now, and I have only had one call fade out.  There are some special considerations that need to be taken into effect with Skype.  For instance, Skype does not tie in to a 911 Emergency Dispatch center, so I need to use my cell phone to call in case of an emergency.

Overall, I am very happy with the service I have received with Skype.  If you have any questions about their service, I would be more than happy to answer them.

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3 comments to Skype vs. Verizon – Saved me $631.70!

  • Update on Skype |  says:

    […] in December, I wrote an article on my switch to Skype for my calls made while at my desk, to cut back on the number of cell phone minutes I was burning […]

  • Jonathan  says:

    Hi Andrew,

    I’ve recently signed up for the same Skype plan as you have described, and it appears that at present Skype is having problems with Verizon or other carriers allowing their customers to call the local numbers provided by the Skype Online number. I am able to make calls to U.S. cell/landlines, but nobody is able to call the local number that I’m supposed to have full access to. Are you aware of any such problem, or have you experienced anything personally similar to this?


  • Drew  says:

    Hi Jonathan,

    I haven’t had any issues calling or receiving calls from Verizon numbers. Verizon is the major cell and landline carrier in my area, so I think I’d have noticed at some point. Please let me know if you are still having problems!


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