American VoIP company Ooma lands in Canada with promise of free calls nationwide

TORONTO - An American company that's received the gold stamp of approval from the respected reviewers at Consumer Reports officially launched in Canada on Wednesday with an aim of shaking up the home phone market.

Ooma provides voice-over-Internet protocol (or VoIP) phone service, which allows users to make calls through an Internet connection rather than using a conventional — and usually more expensive — phone line.

Ooma boasts that its service allows Canadians to make free calls across the country — although there are a couple of asterisks attached to the claim.

For one, the Ooma Telo device costs about $230 up front. The service also costs about $4 a month to cover 911 and regulatory fees.

But CEO Eric Stang believes Canadians will do the math and find value in Ooma, which also has cheap long distance rates.

"We believe economically people will view it as an investment and realize that within about six months they can make back all their money by not having to pay what they're otherwise paying now," said Stang, who noted Ooma has been working on the Canadian launch since the beginning of the year.

Consumer Reports ranked Ooma as the top phone service in the U.S., beating out traditional phone companies and other VoIP services, including Skype. The magazine said Ooma was the "standout" of 12 VoIP options and offered "outstanding value."

But the company is offering a 30-day money-back guarantee if Canadians aren't satisfied, Stang added.

"People can try it — and we know that customers are going to love it — but it's less of a risk for a consumer because they can always return it to a retailer if they wish," he said.

Ooma users can choose a new phone number from 28 area codes or port over their existing number for a $40 fee.

Like other VoIP hardware, the Ooma Telo works by being wired into the Internet with an ethernet cable and then plugging a phone into the device. There's an optional wireless add-on available to give users more flexibility in where they can locate their Ooma Telo device in their home.

The biggest downside with VoIP services is that no calls can be made if the Internet goes down or the power is out.

The largest Canadian phone service providers such as Bell, Cogeco, Rogers and Telus typically charge between about $35 and $43 a month for a line with two or three services, such as caller ID and call waiting (pricing may be lower if the phone line is bundled with other services or if a customer signs a contract). That comes to about $420 to $516 a year and may or may not include any long distance minutes.

There's also a large number of competing VoIP services operating in Canada, which are cheaper than an old-fashioned landline.

Some of the larger, more established names include Comwave, Primus and Vonage. There are also a number of smaller VoIP operators, including Canadian companies Vbuzzer and Voip.ms, that offer low pay as you go calling rates. But those services often require a little more technical savvy to get up and running.

And there's also the Magic Jack, a device that sells for about $50 and plugs into a USB port of a computer. Plugging a phone into the USB device allows unlimited calling across North America for $20 a year —again, assuming the Internet is working well.

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On the web: http://www.ooma.com/ca