Does this sound familiar? You have a cellphone and a landline that together cost you more than $100/month but you hardly get calls on the landline. You have it just so you (or your significant other) don’t run up your wireless bill with long calls during peak hours. But your cellphone is definitely your primary phone.

That was me before I started using VoIP (voice over IP) at home about two years ago. It is easy and inexpensive to setup, will work with your existing telephones, and I’m only paying about $8.50/month for service now. Here’s how:

VoIP gets talked about a lot these days, but it is usually: some service from your internet provider (Comcast, AT&T, Verizon, etc) that is only marginally less expensive than the phone company, really complex to setup (Asterisk), or it doesn’t work with your existing equipment (Skype). What I am recommending doesn’t fall into any of those categories. I am using a SIP-based service called Gizmoproject (Skype’s main competitor) with a hardware SIP ATA (analog telephone adapter).

SIP is the same technology that Vonage uses (they just lock their hardware down to their service). It is a standardized way of doing VoIP (unlike Skype’s proprietary setup); think FTP but for voice. As it is a standard, many different companies offer SIP-based services and products that are interoperable with each other. To get started you need two things, a service provider, and a hardware ATA.

As I just mentioned, I am using Gizmoproject as my SIP service provider, but you could use others if you wanted. They have “Call In” numbers with unlimited inbound minutes that cost $12 for 3 months, or $35 for 12 months. The price for calling out depends on the location you are calling, and the prices fluxuate a little bit. Currently, calling any number in the U.S. costs $0.019/minute. International calls are quite inexpensive as well, see this link for the full list. “Call Out” credits are purchased in $10 or $20 increments.

I should note that you don’t have to have a “Call In” number to make calls, and you don’t have to have “Call Out” credits to receive calls. They are independent of each other.

One of the great things about Gizmoproject is that SIP-to-SIP calls are always free. I set my parents up with this because of that. And because it is all going over the Internet it is a free call whether they live in Luxemborg or Los Angeles. Calls to toll-free numbers (800, 888, etc) are free too. They also came out with a new feature called Backdoor Dialing that allows Gizmo users to call about 11% (currently, but the number is growing) of U.S. phone numbers for free.

Another feature I use somewhat regularly is their call forwarding feature. If you are waiting for a call on your landline but want to run some errands you can just forward all of your calls to your cellphone. I know this can be done with most traditional phone services, but with Gizmo it doesn’t cost an arm-and-a-leg per minute; you only pay your normal per minute outbound call rate.

The hardware SIP ATA I have is a Grandstream Handytone. You can get one that even supports having two seperate lines for about $50 online. My house isn’t hooked up to any POTS (plain-old-telephone-service) service so the SIP adapter just plugs into my household wiring. If you still have a traditional land line service, you can plug a phone straight into the ATA. If you want the ATA to run to all of your phone outlets in your house, just disconnect the phone line coming into you house from the phone company (usually located in the phone box on the side of your house) before you plug the ATA into one of your phone jacks. Now all of your existing phones will be connected to your VoIP service.

You will have to put in a few settings (username, password, etc) into your ATA, but it is pretty easy. Here is a link to Gizmo’s knowledge base entry on setting up a hardware ATA. You can also put in what area code you want the ATA to think you are in. It will add the area code prefix (Grandstream calls it “Home PNA”) you choose to any 7-digit number you call. If you don’t see it in the ATA settings, make sure your ATA isn’t using really old firmware.

Once you have that setup, you are ready to go. When you pick up the phone you will hear a dial-tone just like you did before. You will make calls just like you did before. You will just be saving a lot of money. Last year it only cost me $102 total ($8.50 per month) for this setup! We mostly use it for long calls (my wife talking to her mom) or when we get low on rollover minutes.

There are a few downsides I should point out. Most SIP services won’t transfer your current home number, so if you want to keep that you are pretty limited. Vonage will transfer your number however, and the SIP ATA I have recommended will work with Vonage. There isn’t any 911 service either, but I can always call 911 with my cellphone so that isn’t an issue for me. Gizmo does include free caller ID, but unfortunately it will only show you the number (similar to cellphones) not the caller’s name. Lastly you can’t use a fax machine, at least with Gizmoproject. There are SIP-based Fax over IP services that use the same ATA but they aren’t quite as cheap as Gizmo. They are still probably cheaper than your traditional phone service, however.