Business Phone and Internet Service - the pros and cons

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It is hard to argue against the convenience of a packaged business phone and Internet service. Most of us can be persuaded to go for a one stop solution and the simplicity of a single monthly bill covering all of our telecommunication expenses, but do they make financial sense?

Before making a decision its essential to gather some facts and compare phone services. The key questions are:

1. Is there a minimum contract term and what are the penalties for early termination?

2. The packages typically include cheap or "free local phone calls," but long distance calls are extra. Check the long distance rates applicable and add the cost into the equation.

3. Not all Internet services are equal. They can vary substantially in speed and quality of service. Is the plan capped in any way? If the plan does not provide unlimited uploads and down loads it's essential to find out what the caps are?

4. The fine print - it's important to read it. In general the phone companies will attempt to get by with just reading the terms and conditions over the phone and then asking for verbal confirmation of understanding and acceptance. Always ask them to email the T&C's and call back the next day. They won't like it, but whose problem is it? It's also an opportunity to cool off before committing.

Business Phone and Internet Service - the pros

1. Simplicity and convenience. One bill to pay and depending on the deal it could be a fixed amount every month, which is great for budgeting purposes.

2. Set and forget, at least until the anniversary or renewal date.

Business Phone and Internet Service - the cons

1. Business phone systems are without doubt the most important channel of communication with customers and suppliers. We would argue that no small business can afford a commitment to a one or two year contractual term. Note point #2 below.

2. The business phone and Internet service space is highly competitive. New and innovative solutions are emerging all the time. Many virtual or hosted VoIP PBX service providers such as Nextel and RingCentral don't require a contract.

3. Phone companies in particular have used these packages as part of their defensive strategy. They are under siege especially from small business phone service providers. By packaging voice with Internet services they hope to blur the differences between the options - see point #4 below.

4. Cable companies and Internet Telephony Service Providers (ITSPs) generally use the latest IP technology, whereas the traditional wire line carriers are still using old style TDM technolgy. As a result the new players can more cost effectively offer features and facilities. They can also offer highly competitive long distance calling rates.

Summary

We would suggest that the highest priority be given to finding the best Internet service provider. As a completely seperate exercise we would look for a small business phone service. Nextiva amonst others advertise their willingness to run a small business VoIP service over any high speed Internet connection.

It is the companies that specialize in providing business phone solutions to small business that have demonstrated the greatest agility and delivered the best value for money.

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