First off, I have a Time Warner basic (no premium channels) cable plan with high-speed broadband Internet (15M downstream and 1M upstream) that runs me about $115.00/month. I have an AT&T landline in my home that runs another $40.00/month. An original model iPhone through AT&T runs $60.00/month, so that comes out to a whopping $2580.00 a year!

Now I've had a Skype account since its conception and decided to explore the option of using it for my home phone, and also with my iPhone. Skype is one of the premier voice over IP (VoIP) telephony services on the Internet. With Skype, you can make free Skype-to-Skype calls (including video calls) over the Internet, send cheap SMS text messages and also make unlimited calls to landline phones with a Skype-Out account. People can even call you from landline phones if you have a Skype-In number. If you run a business, you can also save money with a Skype business account.

I started shopping around for Skype-compatible hardware and found that both Linksys and Netgear make some nice cordless "Dual-Mode with Skype" phones. These units (shown below) are pretty much identical, take less than five minutes to set up (see last video below) and come with a base station that simply plugs into your router. The base station connects directly to Skype, so there is no need to keep your computer running all the time to make or receive calls. Being Dual-Mode, you can also use these phones in conjunction with your existing home landline to make or receive calls on either line.

Below is a photo of the handset screen. It's brightly lit, easy to navigate and works about the same on both models. Also, the handset on both models has a built-in speakerphone that works exceptionally well.

Handset Screen

Netgear SPH200 Dual-Mode with Skype

Linksys CIT400 Dual-Mode with Skype

I've always had good luck with Linksys products and support, so after reading a lot of positive reviews of the CIT400 Dual-Mode with Skype model and the fact it has an additional year warranty vs. the Netgear model, I snapped one up at Amazon on sale for $96.99. Current average prices range about $130 to $150 for either model.

To power the unit, I pugged it in my Belkin APC that I used to have my Power Mac G5 plugged into. This way, if my power goes out, the phone will still function, providing cable is working. If the cable's out, I still have the iPhone for backup, so I'm covered in case of emergencies.

Now here's an option I use to cut my cellphone bill. To make or receive Skype calls on my iPhone, I installed an app called fring. (Presently, you need to jailbreak* your iPhone using software like Ziphone 3.0 to install fring, because it's not available in the App Store yet.) With fring installed on the iPhone, I can now make and receive world-wide Skype calls via WiFi. I also installed a web app called txtDrop that allows me to send an unlimited number of free text messages in the US and Canada.

Skype contacts list and keypad via fring on an iPhone

If you are presently using an original iPhone (1.1.4 firmware) with an AT&T contract and just want to install fring to save on minutes or long distance fees, all you need to do is jailbreak* your iPhone with Ziphone. Note: No need to jailbreak your iPhone to send the free text messages with txtDrop.

To get my iPhone's cellphone working without a contract, I bought a T-Mobile activated SIM off eBay for $6.95, which even included free calling minutes. I deposit as little as $10 every three months in my T-Mobile Pay As You Go account to keep my phone number active. Unused minutes roll over. If you spend $100, your minutes are good for 365 days. Also, if you want get the web and email via unlimited EDGE, you can get that too via T-Zones for a mere $5.99 a month.

Alternatively, if you want to use AT&T's network, you could buy an AT&T SIM and use their prepaid GoPhone plan. I use T-Mobile simply because of better coverage in my area.

Another free service I use in conjunctions with my phones, is Google's Grand Central. Grand Central provides me with a universal lifetime phone number (with free voicemail emailed to me) and routes one or all of my phone numbers through them. How does that work? I program both my Skype home phone and T-Mobile cell numbers in their control panel. If anyone calls my Grand Central number, both my home and cellphone rings, so I never miss a call--especially when I'm mobile. I also have the option of answering either via fring (to save minutes if I'm in a wifi hot spot) or my T-Mobile number, on my iPhone.

So, let's look at some cost comparisons here.

Summary of costs comparisons:

Initial cost of Linksys CIT400 Dual-Mode cordless Skype phone: About $130. (I was fortunate enough to get mine on sale at Amazon for $96.99.)

Skype-In account (incoming local phone number): approximately $25/year
Skype-Out account (unlimited long distance in US and Canada plan): approximately $25/year

Cost of home landline via AT&T: $40.00/month or $480/year (does not include any long distance.)
vs.
Cost of hone landline via Skype: $50/year (includes free long distance in US and Canada.)

Cost of AT&T iPhone contract: $720/year (this will increase to $84/year for the 3G iPhone.)
vs.
Cost of T-Mobile Pay As You Go minutes: $40/year ($10 every 3 months - add $5.99/month if you want unlimited EDGE.)

So if you do the math, I'm saving over a $1,000.00 a year on my phone bills (also gaining free US & Canada long distance) by using Skype and taking advantage of my broadband Time Warner cable connection, and also using Skype via fring on my iPhone.

Now this may not work for everyone, but if you have a broadband Internet connection at home and are near wifi hot spots frequently when you're mobile, you can certainly save yourself a considerable amount of money. Tip: You can find wifi hot spots with WiFi Finder by entering "http://iphone.jiwire.com" in Safari on your iPhone. Bookmark it by tapping on the "+" tab and saving the icon to your screen.

Important note: 911 calls are not supported on Skype. I found out though that I can call my local police department's 911 desk using a direct number. I can also use my iPhone to make 911 emergency calls. In fact, I have a 911 app installed that places a 911 icon on my Home screen. All I have to do it tap it twice to make an emergency call, so I'm covered for emergencies.

Also, voice over IP calling does have some drawbacks, but so far, it has been working out great for me. No dropped calls, static interference or echoing. The audio quality and reception is excellent -- even on the handset's speakerphone. I call friends over in Europe now for free and they sound like they're sitting right next to me. In all fairness though, my strong high-speed broadband cable connection does contribute to this overall performance. Forget about using VoIP with a dial-up connection.

To find extensive information on VoIP calling, and to help determine if it may work for you or your business, see About.com's VoIP site. It has a lot of articles discussing Skype.

You can download Skype here and try it out for free.

fring Demo on iPhone

How to install fring

How to jailbreak/unlock an iPhone (1.1.4 firmware) via Ziphone 3.0

Netgear SPH200D Dual-Mode Cordless Phone with Skype

*Note: Jailbreaking/unlocking an iPhone may void your warranty.

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