The telecommunications landscape is changing quickly. First it was domestic long distance rates being cut by the major telephone companies like AT&T, and MCI. Then the cellular companies came out with free nights and weekends and nationwide long distance, included in your monthly plan. Now internet telephone companies like Vonage and Skype are trying to encourage you to try their service by offering free international calls.



You have to ask yourself. How do they make money, if everyone is making calls for free?

I found out that it's not so complicated, and the telephone companies know just what there doing. First, when pricing a telephone plan, carriers look at what there average is for termination charges. Termination charges are what telephone companies pay to other telephone companies when a subscriber places a call outside of their network. Telephone companies for example, offer a plan for $49.95 monthly including 500 minutes of cellular service. They would then look at what the average number of call minutes their customer's make in which they incur a termination charge. If their average customer uses say 50 minutes of calls and then multiply by the average termination fee of say 5 cents, and know there termination cost would be $2.50 per customer. Then there's advertising, administration, hardware, etc. to get there total cost. That is why you see cellular carriers promote free incoming calls and free calls to other subscribers to there service, no termination cost.

We did some comparisons on what's available today for free:

Most Cellular Providers: Will require a 1-2 year commitment to get a plan that includes their free nights and weekends and nationwide long distance. And vary greatly on charges for International calls.

Skype currently offers free domestic calls in the U.S. from your PC to telephones until the end of 2006. We found charges $.02 up to $1.25 per minute for international calls. From time to time they have offered free international calls to certain countries as an inducement to try there service. One limitation is you have to call from your PC using an internet connection.

Vonage once you sign up for a monthly plan, offers free calls to the U.S. and Canada. And also charges $.02 to $1.25 per minute for international calls. Vonage will send you a telephone adapter that you will need to use with your internet connection and telephone.

Free International Call is offering free international calls without signing up for their service or having a plan. You place a call to a U.S. number in Iowa (712) area code, it answers and prompts you to enter the country code and number and places you call. Because so many people have cellular and home plans that include domestic long distance, most people are literally able to place international calls to over 50 countries without being charged if you call from a phone that incurs long distance charges you will incur the U.S. long distance rate for a call to Iowa and we found that most but not all rural residential and cellular areas are covered in each country.