About
Free VoIP Phone Service

The first VoIP pioneers held credit for introducing free VoIP phone service. Placing a computer to computer call remains free. But calling to a fixed or mobile telephones cost you some cents per minute.

Although some companies provide free VoIP phone service, it does not mean they get it for free nor do they lose from the service. I'm going explain with an example why and how they do it below. First it's vital to mention the methods and how or where the Internet phone call starts.

The methods

You know, all VoIP call is originated from somewhere using some type of devices. In other words, when you place an Internet call you could use one the following ways:

a personal computer or laptop that's equipped with a VoIP soft-phone dialer and a headset

a VoIP device such as Analog Telephone Adapter, VoIP gateway, IP phone and other types

PSTN line - in the case of pre-paid calling card and call back

cellular or mobile phone - known as mobile VoIP, an app you install on your smart-phone and enables you make a call and text

The process

OK we said you originate the call using one of the above method then what happen? The following process takes place:

the call travels via the Internet to your provider's switch / server

your VoIP provider receives the call and bypasses it to a terminator i.e another VoIP provider or LEC (Local Exchange Carrier)

at the destination, the termination provider receives the call via the Internet and delivers it to your desired destination telephone number

Let's use Skype as an originator example and AT&T as a terminator. When Skype users make a call to fixed and mobile phone numbers in USA, it sends the traffic to AT&T. Then AT&T connects the call to the desired numbers.

The charge

Always the termination company charges an origination providers at wholesale rates per minute. The originate pays because it uses local exchange carrier's physical telephone lines (PSTN). Hence, it becomes not completely FREE.

The reason and how free service offered

So we ask, why would any company offer free minutes while it pays for it? That is the next thing I'm going to talk about with the following story...

Dialpad Communications Inc. was one of the first VoIP provider that started offering free computer to phone calls in 1999. Dialpad came up with an an intelligent way of doing business...

1. users download a soft-phone dialer from Dialpad's web site

2. they called any number in Canada and USA for FREE

Dailpad's soft-phone application looked like this...

Now, see the words at the top of the dialer "20% BONUS - on your first deposit". That is an advertisement. Dialpad placed commercial banners like that. When users click on those banners, Dialpad and its partners made some money.

Latest update

As of January 30, 2013, Yahoo will no longer offer its Yahoo Voice (Phone In and Phone Out). Here's Yahoo's announcement .

The end story? On June 13, 2005 Yahoo acquired Dialpad and the service was later replaced by Yahoo Voice.

Just to mention other companies which used to giveaway freebies but either the firm or service no long exist: