Voice over IP (VOIP) internet telephony has changed the landscape for long-distance and even local phone calls. I can now call Japan for pennies on the minute. In fact, it's cheaper for me to call Osaka from New Haven than it is to call Osaka from Tokyo on a regular NTT telephone line!
Here are the rates that I've found for the various companies for calling plain-old-telephone-system lines (POTS) as well as for calling mobile numbers:
Company POTS / Mobile -------- ---- ------- Skype 3c / 17c Vonage 5c / 17c Packet8 4c / 17c Lingo 3c / 17c
I personally use Skype/SkypeOut. I found that they had much better voice quality over slow internet connections than Vonage, which I also have. And it helps that Skype is also cheaper. The one advantage of Vonage is that it has a POTS adapter so you can use your regular cordless phone or fax machine with it -- but you really need a very highspeed connection for Vonage to give you good quality. When I was in Japan, my LeoBB broadband provided through my apartment company was not highspeed enough for Vonage to work properly. I ended up using Skype exclusively.
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