Do I need a landline?

Should you think about ditching your home phone altogether or is there life in the tried-and-true service yet?
 
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01 .Introduction

vintage-phone

There are all kinds of alternatives to a landline phone connection these days, but we find landlines are not quite obsolete yet. Whether or not you should get rid of your landline depends on your telecommunications habits. It also comes down to how you feel about predictable cost and reliable service.

Landline advantages

Not surprisingly, Australia’s two major landline service providers, Telstra and Optus, assured CHOICE that landlines still play a vital role for many consumers. It's a position backed by Australia’s telecom regulator, the Australian Communications and Media Authority (ACMA).

According to Telstra spokesperson Karina Keisler, the top reasons to hold on to your landline include:

  • The ability for emergency services to pinpoint your location in the event of a triple-zero call. (Mobile phones can only reveal the general vicinity of the caller.)
  • The flexibility of untimed local calls. (Mobile phone users generally have to worry about staying under monthly usage limits – and frequently go over them at significant cost.)
  • Reliable broadband internet access that can handle increasingly popular “bandwidth hungry” applications. (Wireless broadband access through mobile 3G or a wireless modem is slow compared to fixed lines and not good at handling large amounts of data.)
  • The ability to connect a fax machine or back-to-base alarm. (This can’t be done without a landline phone connection.)

More generally, there are those who will want to keep a landline to maintain a communication option that parents and grandparents are comfortable with – and to capitalise on the heavily discounted STD and international call rates most carriers now offer.

The internet factor

An ACMA spokesperson told CHOICE that wireless broadband is today’s fastest-growing option for going online but probably not suitable for heavy internet users. “Fixed-line networks continue to carry the bulk of data downloaded from the internet – 91% at June 2010. If consumers want flexibility in terms of where they wish to access broadband, wireless internet will be attractive. If, however, they’re seeking to use bandwidth-hungry applications, landline or fibre will be more suitable.”

There is also an economic side to which is more suitable. An 8GB mobile broadband package from Optus currently sells for about $40, for instance, while for around $50 you can get up to 120GB of data with a landline set-up.

Cost and coverage issues

mobile reception zoneThe widely publicised breakdown in Vodafone mobile phone service late last year had customers saying things like “shocking reception, disgraceful support and awful customer service” and gave rise to a class action suit against the company.

This event – and the continuing frustration of customers when it comes to figuring out pricing plans – underscores two longstanding and perhaps permanent problems with mobile technology: unpredictable service and cost. They’re both factors to keep in mind if you’re considering ditching  your landline phone.

Teresa Corbin, CEO of the Australian Communications Consumer Action Network (ACCAN), says the mobile landscape is an untamed frontier. “There are no performance standards with mobiles, whereas with landlines you do have standards,” she says. “Customer service guarantees for landlines are now in the order of 97%-98% reliability. There are no such guarantees for mobile service and there may never be.”

Some consumers might want to retain a landline for voice calls if mobile coverage is limited where they live or work. While Telstra mobile claims to provide service to 99% of the population, it's hard to substantiate. You can lose service for any number of reasons, including the number of people who are using the network at any given time. One groundbreaking deal that recently emerged is worth looking into: the Amaysim allows you to buy a SIM card separately and use it in the phone of your choice. The technology has yet to be proven over time but could be a welcome alternative to capped plans, prepaid and the like.

Mobile plan confusion

Mobile pricing plans remain so complicated and variable that consumers often get hit with unexpected charges. ACMA says that “58% of mobile capped plan users report exceeding their capped plan expenditure limit at least once [in the year to May 2010]” and adds that “information around capped plans was a key source of complaint by consumers, with many consumers claiming they were not made aware of the charges that apply once a cap is exceeded, leading to a high incidence of bill shock”.

Virgin Mobile customer Stuart Johnson recently had a taste of bill shock after doing some web searching while on vacation. “If you reach 90% of your credit limit, they’re supposed to let you know by SMS,” he says. “I got a text at 2AM, at least three days after it should have come; by then, the bill for my $35 monthly rollover plan was $396. I had no idea my credit limit was so high [$400]. Virgin certainly didn’t make it clear – they waffled on with so much stuff during the sales process that it was impossible for me to work out what was important and what was not.”

Complaint Update

In the first three months of 2011 telecom complaints have gone through the roof. The Telecommunications Industry Ombudsman (TIO) service reported on 4 May that 59,532 new complaints were made to the TIO in the first quarter of 2011, an increase of 31 per cent on the previous quarter and the most complaints in the service's history.

Vodafone customers made 14,670 new complaints to the TIO in the first quarter of 2011, an increase of 96 per cent from the previous quarter, but complaints for most large service providers also increased.

Mobile phone complaints alone increased 50%, and the central theme was consumers getting stymied by unclear and complicated contracts and ending up financially overextended. Ombudsman Simon Cohen said “telephone and internet companies need to do more to make sure consumers are given the right information up front, and provided the right tools to monitor their usage and charges.”

The quarterly increase comes on the back of a 36% increase in credit management issues over the previous financial year, a result of consumers not understanding the service they have contracted for or the charges they will incur, the TIO says.

“Credit management issues are particularly concerning because consumers most affected are often also the most vulnerable or disadvantaged.

 

 
 

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Voice and internet alternatives

 phone-line-cutVoIP (Voice over Internet Technology) has proven a popular low-cost alternative to both mobile and landline phones. VoIP technology allows you to make voice calls over the internet. Voice conversations travel through the internet as data packages and can connect with a landline or mobile phone. However, like mobile technologies, VoIP has also been rocked by reliability issues, and providers make no promises about your being able to get through when you need to. Shortly before Christmas last year, VoIP application Skype dropped out worldwide – not the first time the service came to a standstill. That said, VoIP services have become a critical low-cost component of many Australians’ telecom packages and can be used with a VoIP phone, bundled with naked DSL or used through a web-based application (like Skype) on a computer or smartphone. Some plans that combine Naked DSL with a VoIP service offer free national calls to landlines in addition to cheap calls overseas.

Another option is a SkypeIn number, which allows you to make long-distance national calls at local rates (calls between Sydney and Melbourne, for instance, would be charged as if you were calling from within Melbourne if you purchased a Melbourne-based number).

Naked DSL provides most of the advantages of a fixed broadband line without the monthly line rental charge, but it too is not as reliable as a fixed line.
Naked DSL makes a landline internet connection possible without having to pay for telephone line rental. But beware: the ADSL still runs through the landline and activating it can be costly. One CHOICE staffer’s attempt to set up a naked DSL account with TPG hit a roadblock when Telstra informed him he would have to pay a connection fee as well as line rental for at least three months. Another said dumping his landline was “a big hassle” including hours on the phone with telecom providers, long waits for technicians to show up, and incorrect billing from Telstra that took months to get right.

Should I ditch my landline?

Before deciding whether or not to ditch your landline, undertake a rigorous assessment of your telecommunications profile, including where you live, how many calls you make, and where you call. If you’re a fairly heavy user of your home phone and internet – and reliability is important – keeping your landline may make good sense. (And if you’re a habitual long-distance caller and have an internet connection, getting a handle on VoIP can save you money whether you keep your landline or not.) But if you’re a light user who lives in a metropolitan area and rarely exceed your monthly mobile phone allowance, it may be time to let your landline go.

Number crunch

82% - The percentage of adults with a landline phone who are also paying for a mobile service and internet connection, as of April 2010.

33% - The percentage by which the number of consumers aged 18-24 who chose not to get a landline connection increased in the 12 months to November 2010.

14% - The percentage of consumers who only have a mobile and no landline.

CHOICE staffer Rein Vogel hails from the Netherlands and stays in regular touch with family and friends overseas via VoIP. He explains how his particularly advanced home set-up not only saves him money in phone calls, but allows a sophisticated entertainment system that connects directly to the internet.

Using VoIP for phone calls

Rein uses VoIP to make calls on his mobile, home phone and computer.

Rein's home phone, once run through a landline, is now ‘wireless’, meaning he has no separate phone line. Instead the family's handset is connected to their wireless router. His particular plan includes free national calls and cheap calls to Europe. It is worth noting that all calls are made through the internet and as such do use data.

His mobile phone, an iPhone 4, allows him to download apps like Skype and Viber. Both these apps allow users to connect with and talk to other users who also have access to the apps. Again, the calls are ‘free’ but do use data, so it’s advisable to connect to your home Wi-Fi before making a call.

His computer Skype is just one of the VoIP technologies you can use to make data-only calls. All you need is an internet connection on your computer and to install the specific software that suits your needs best. Fast download speeds provide the best connection. Our review of VoIP routers has lots of useful background information on VoIP.

Networking it all together 

The head bone’s connected to the neck bone. The neck bone’s connected to the back bone. In this case, the head bone is the wireless router and the neck bone is the television, the computer or the telephone – all pulling together to form a bigger communication and entertainment unit.

Television  Most internet-capable televisions currently available can be connected directly to wireless router – via wireless adaptor or Ethernet cable. Rein uses the connection to purchase and download films directly to his television, and to watch the range of internet channels currently available.

Internet His current set-up allows his browsing habits to be as portable as his laptop or smartphone: he can catch up on world news on his iPhone over breakfast in the garden or wirelessly communicate with family and friends overseas on Skype. Rein explains one of the benefits of this wireless communication is that he can communicate with friends and family while ‘walking’ them around the house and showing them his home and the kids (via his computer's camera). Giving the person on the other end of the line them more insight into his family’s day-to-day life than a traditional phone call ever could.

Rein estimates his family are saving an average of $50 - $60 a month on phone and internet bills since bundling them all together.

Which plan is right for you?

In order to facilitate this kind of integration outlined above, CHOICE advises you do some research into the levels of data you anticipate using before committing to a plan. Our articles on broadband basics and broadband plans provide lots of useful information about finding the right plan for your needs. Moving between plans mid contract can prove costly. We shopped around and found out that some providers charge a substantial amount to downgrade. TPG came in at the highest with a whopping $59 downgrade fee, Optus was not far behind at $50 and iiNet a slightly lower $29. CHOICE recommends monitoring your current data levels for a few months, or talking to internet users with similar usage patterns to find out what suits them before signing up to a plan that might prove unsuitable.

Not keen on committing to a two-year contract? After asking a few question Rein found he could avoid signing up to a two-year contract with iiNet by paying a one-off cost of $100.

Reliability of connection 

Rein lives in inner Sydney. While his connection can drop out in parts of the garden, he says the connection inside the house is always good. He has only experienced one minor connection issue which rectified itself within 15 minutes. He experienced no problems during the busy Christmas period, a time when communication levels are traditionally at their peak.

CHOICE recommends finding out what kind of connection levels are available in your local area before committing to a new contract. It can differ dramatically between one provider and the next, even in high-density urban areas. Our article on wireless broadband highlights this issue.

CHOICE verdict

Rein has no pitfalls to report. He does advise making sure you do your research and quizzing your provider about your options before committing to a contract to make sure they give you the best deal possible. As always, if you don’t like what you hear don’t be afraid to shop around.

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