Contracts can be tricky. While some users embrace the ensured stability and structure, others bolster a manic paranoia and fear of fine print and technicality. Fears and reservations aside, contracts can be useful in fleshing out a provider-user agreement by establishing a standard for terms of service, pricing, and quality of service in detail. Yet despite this binding stability, many consumers still view contracts as shackling constraints. Many fear that a binding agreement can lead to drop in call quality, infrastructure nightmares, and less flexibility as companies manipulate and exploit legal technicalities. Service providers typically offer options that constitute non contract plans (month-to-month) and contracted plans (yearly prepaid agreements). While non contracts may be more appealing (as it does have its advantages), contracted solutions are not the monstrosities they are often made out to be.

One of the main differences between contract and non contract VoIP is pricing. While contracts typically require prepayment and a longer commitment, they are often cheaper than non contracted plans. For example, Phone Power, a residential/small business provider offers pricing at $19.99 (per month). Opposite this, they offer one year pricing (prepaid with second year free) at $199.95, which breaks down to $8.33 per month. Though users have to prepay, cost savings is substantial. Along with reduced cost, contracts guarantee a fixed price–denoted in the paperwork. So, while plans may grow in feature, service, etc. contracted pricing will not fluctuate in response. In contrast to this, non contract VoIP pricing can fluctuate to reflect industry competition, service growth, and other factors.

Despite price stability however, contracts don’t typically allot users the same flexibility non contract VoIP does. For example, if users wish to add or drop a service, they may not be able to—or, they may still have to pay the same pricing plus fees. Additionally, contracts lock users into service; therefore, they are not able to leave in lieu of a better solution. For example, if a competing provider offers extensive service at a lower rate, users may not be able to take advantage of the offer. While they may have the option of cancelling service, this typically opens users to various cancellation and policy termination fees. This circles back to the price advantage. Though contracts may offer reduced pricing, they may be subject to policy, cancellation, and other fees; therefore users should be sure of the service and provider they are entering into a contract with.

User’s Choice: Contract vs. Non-Contract VoIP Contracts aside, non-contract VoIP service allots users the ability to pick and choose service and feature as they please. Users have the ability to add and drop service/feature, as well as move to providers as they see fit. While contracts may be useful for long term service, users looking for short term solutions will most likely benefit from non contractual service. Non contract VoIP also better manages scalability. If a user’s needs grow, a contracted service may inhibit or complicate a service response. Non contract service, however, can be adjusted to fit users’ fluctuating needs. On the other hand, contracted VoIP is a fitting solution for stable users—i.e. established businesses. Users that know their long term needs may be better suited for contracted VoIP.

Ultimately, contracted VoIP is a solid option for stable, long term users. While it features pricing benefit and stability, it is substantially less flexible and subject to fees. Contracts are not the nightmare they’re often perceived to be, but non contract VoIP allows for greater scalability and flexibility amongst users. Though pricing may lack stability, non contract VoIP ultimately offers more choice. For users looking for a steady and concrete service, contracted VoIP may be the right solution; however, non contract solutions are typically users’ best bet. 

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