Smart Money

Is Ooma Free Home Service A Scam?

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The other day I ran across Ooma on the Internet. Ooma purports to offer free internet phone service with the purchase of an Ooma device that connects your phones to the Internet. Then over Christmas my cousin, who works for our local cable company, asked me if I was going to get Ooma. He’s researched Ooma and plans to purchase one this week. That led to a long discussion, and my conclusion that Ooma is legit (Ooma must be legit, it has a Wikipedia page!).

According to its website, here’s what Ooma offers:

Ooma is a revolutionary device that allows you to call anywhere in the U.S. with no monthly fees. You can also make international calls for next to nothing. Ooma is easy to set up and even easier to use. You don’t need a PC. You don’t need a headset. You simply connect the device to your high-speed Internet and your existing phone, and that’s it. You’re ready to start calling and experience Ooma’s great voice quality.

So how much does Ooma cost? To use Ooma you must purchase an Ooma device that connects your phones to high speed internet. There are basically two choices, the Ooma Telo and Ooma Hub. Either one will connect your phones to the Internet, but the Telo appears to be the latest model of the device. According to Amazon the list price for the Telo is $249.99, although Amazon has the Telo on sale for $234.00. The list price for the Hub is also $249.99, but is on sale for $214.95.

The big question for me was whether there were any more costs. If not, a one-time fee of just over $200 would be far better than even the low monthly cost of Vonage I currently pay. From my research, calls are indeed free, but there are a couple of add-ons that cost some money. First, if you want to port your existing number over to Ooma, there is a one-time fee of $39.99. Since we definitely want to keep our existing number, we’d have to pay this fee. Second, Ooma offers Premier services that add extra features to the service. Ooma Premier costs $9.99/month or $119.99/year. Whiile you don’t need Premier to use the phone service, it does provide a long list of additional features, including a second line, 3-way calling, enhanced voice mail features, call screening, and call forwarding. When you activate your Ooma line, you get Premier for free for 60 days. If you purchase the Premier service for a year, Ooma will port your existing telephone number for free or give you a free Ooma handset.

So how much money can you save with Ooma? The answer to that question of course depends on how much you spend today on phone service. For us, we pay about $32 a month for Vonage service. With Ooma, we’d recoup the cost of the Telo or Hub in about 8 months, and the rest would be savings. According to Ooma, savings over 2 years range from $450 to $930, depending on how much you pay today for your phone service.

One question all this raises is what’s the future of traditional telephone service. With the introduction of internet phone service several years ago, I assumed landlines would eventually be a thing of the past. Now that the cost of VoiP has come down so much, it seems like the day is coming when the cost of telephone service will approach free.

Still, if you’ve used Ooma, please leave a comment to let us know what you think of the service.

Rob Berger

Rob Berger

Rob Berger is the founder of Dough Roller and the Dough Roller Money Podcast. A former securities law attorney and Forbes deputy editor, Rob is the author of the book Retire Before Mom and Dad. He educates independent investors on his YouTube channel and at

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