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Can VoIP Cut Your Mobile Costs?

VoIP: It looks weird written out, it's fun to say and it can help you save money on your telecom costs.

How to get started with mobile VoIP
How to get started with mobile VoIP

As an example, let's use Skype on the iPhone:

1. Download the Skype app from the iPhone store.

2. Sign up for Skype service for free calling over 3G or Wi-Fi to other Skype users on a mobile device or connected PC.

3. Buy Skype "credits" to call non-Skype users, paying just cents per minute (depending on where you're calling).

4. Use Skype seamlessly on the iPhone: Receive calls in the background like a regular phone call, and while on a Skype call do other tasks--like check your e-mail or your calendar--without hanging up.

For businesses looking to save money on telecom costs, Voice over Internet Protocol (VoIP) technology has been a go-to method for some time. But can it help you cut your mobile bills as well? The answer isn't as straightforward.

For many tech watchers, the big story in mobile VoIP was AT&T and Apple's concession last summer, after months of stalling, to allow popular VoIP service Skype on the iPhone. Why the delay? AT&T didn't want VoIP dialing to cut into its voice-service revenues, and Apple--well, it seems Apple was just being its usual controlling self.

Today, mobile users not only can use Skype apps on the iPhone, but also on Android, BlackBerry and Nokia devices. Skype even has a version of the app for Verizon users that sends the calls over its regular voice network. Skype isn't alone in mobile VoIP, either. Rivals like Fring, Truphone, Nimbuzz and Vonage offer similar capabilities. Just download the app to your phone and go. Still toe-dipping in mobile VoIP is Google, which could change the voice game altogether when it finally takes the plunge.

Is mobile VoIP free? It depends on how you look at it. Most carriers still require users to have a voice minutes plan. If that's true in your case, go for the minimum. Then use your mobile VoIP app for free app-to-app calling. Your only cost for that is your data usage (technically free with an unlimited data plan; trickier if you pay by the byte). Want to call out to regular phone numbers? No big deal. Most mobile VoIP services charge a pittance for the capability. Fring, for instance, was recently charging 0.9 cents (yep, less than a penny) per minute; Skype offers unlimited calls in the U.S. and Canada starting at just $2.99 per month. If you can master the math and don't mind dialing-by-app rather than hard key, the savings can add up quickly.

Like this article? Get this issue right now on iPad, Nook or Kindle Fire.

This article was originally published in the March 2011 print edition of Entrepreneur with the headline: VoIP Hits The Road.

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