VoIP And Contract Free Service With No Commitment

Long-term contracts are a staple in the telecommunications industry. Even before the existence of viable alternatives such as VoIP, phone companies insisted on clients signing long-term service agreements in order to lock them in for the foreseeable future.

With VoIP steadily gaining in popularity, many business organizations find themselves unable to upgrade and keep up with the latest communication technology simply because they are locked into contracts with their current provider.

Long-term contracts can offer a few benefits for enterprise customers such as billing and accounting made easier since the contracts are renewed on an annual basis as opposed to making monthly payments. Such contracts can also be a hedge against rising prices so that the business continues to be charged the same even if costs increase on the vendor side.

On the other hand, there are many disadvantages in signing long-term contracts:

Vendor lock-in

In the days before VoIP, lock-in was not so important since technology progressed very slowly. If new features become available only once every 3 to 4 years or so, annual contracts do not appear to be a bad thing. However VoIP is progressing much faster than analogue communications.

A year is a long time on the Internet and vendors seem to be adding new features every couple of months. This means that a business might want to switch to a competitor offering newer features long before their current contract expires.

No benefits from lower prices

While long-term contracts ensure that a business will not be affected by rising prices, the VoIP industry is seeing a downward trend in prices due to intense competition and a rapidly growing market. VoIP providers regularly reduce prices in a bid to attract or retain customers.

A company that still has several months or years remaining on their contract will not be able to take advantage of low prices being offered by the competition.

Same expenses even if you use less

With annual or multi-year contracts, organizations find themselves paying the same amount even if they use fewer services. For instance, if a business downsizes due to an economic recession they would have no option but to keep paying the same amount for phone services. At best this could lead to a reduction in profits and at worst, could even bankrupt the company.

VoIP is a contract free service

One of the distinguishing features of the VoIP industry is that customers are charged on the services that they actually use per month. If a company reduces its workforce from 100 to 90 employees, they will be charged commensurately from the current or next month. The business does not have to wait until the contract expires in order to re-negotiate more favorable terms.

Apart from the fact that VoIP vendors often charge less for comparable services from phone companies, the lack of contracts alone could end up saving an organization thousands of dollars in phone bills. Being able to pay on a monthly basis not only reduces the burden of making high upfront payments but also provides the flexibility that is essential for any organization to function effectively in today’s competitive business environment.