The number of companies offering VoIP telephone service has vastly increased in recent years. As more companies have gotten in on the act--and as the more successful companies have grown or been bought out by even larger companies--the quality of service and breadth of features offered have improved immensely. All of this adds up to more choices for consumers, better service offerings, and more competitive pricing.

VoIP companies fall into one of several categories--discount service providers, comprehensive service providers, and VoIP hosting providers. Discount providers generally offer few equipment options and only the bare minimum in terms of customer service--but service is delivered at rock bottom prices. If cost savings are your main concern, and you can troubleshoot any glitches that may arise, a discount provider may be the right choice for you.

Comprehensive providers offer all of the equipment you will need to set up your home network and integrate VoIP telephony into it, or integrate VoIP telephony into a complex business network. Such providers also offer more equipment options than their discount counterparts and can provide complete installation services. They will also usually provide you with technical support for building and maintaining a reliable VoIP system.

Your third option for VoIP service is a hosting provider. These companies keep most of the equipment on their own premises and handle all necessary repair and maintenance work. Their customers simply plug in their VoIP telephones and use them. While VoIP hosting companies provide the simplest VoIP solutions, they are usually a bit more expensive than their competitors.