New kid on the block JaJah vows to overtake industry leader Skype within a year.


Technology darling Skype is facing stiff competition in the race to gain control of the potentially lucrative internet telephone call market.
This week, California-based telco JaJah will launch a service offering customers free local and international calls. Pitching their product as a simpler, safer and speedier solution, the nascent corporation claims that this is the first stage in a strategy designed to ultimately deliver zero-cost voice communications to all.

“We believe that basic telephony services should be secure, uncomplicated and free. They should incorporate the best aspects of the internet, mobile phones and landlines, and that is what we are beginning to offer customers across the UK,” says company founder Roman Scharf.
“We are doing for the telecoms industry what iTunes has done for the music business. Skype claims to have 1.5 million paying customers, but we will beat that in our first year.”

The JaJah service works using any existing telephone. Users log on to the service’s webpage, type in their own number then the number they want to call.
A few moments later, their own phone rings and, after a few seconds delay, the call is connected.

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Calls to UK landlines and international numbers belonging to registered JaJah users are completely free. Those to British mobiles and unregistered lines are charged at rates typically 80% less than BT’s.


In some countries, free calls are also available to mobile phones. This is not yet the case in Europe, but the situation may change.

“There is a steady trend driving wholesale call prices downwards.
“At the moment they are too expensive within the EU, but we are negotiating with the providers and are confident that it is only a matter of time until we can provide free calls to all mobile phones.”

Until recently, VoIP pin-up Skype’s 54 million registered users ensured their perception as the unassailable king of the internet telephony sector and set the $2.6 billion that eBay paid for the company last year.


With the launch of JaJah’s non- computer based system and the emergence of critically acclaimed new competitor Gizmo, however, its hold on a global market that Yankee Group forecasts to be worth $3.3bn by 2010 suddenly doesn’t seem so assured.


Nobody at Skype was available to comment on the growing threat to their current dominance, but the company cannot have been caught by surprise. The widely acclaimed potential of the VoIP sector has set Silicon Valley buzzing, and a diverse range of operators including Cisco, Cable & Wireless and Microsoft have all begun investing heavily in the field.


Microsoft has declared its intention to bundle a package with its upcoming Office 2007 package, indicating the Redmond giant’s view that integrated voice, e-mail and instant messaging communications will be at the centre of the next productivity push.


It is now broadly accepted that internet telephony is also set to take a chunk out of mobile and fixed-line operators’ revenues. According to research from the OECD, Europe already has 11 million users and that figure, according to many analysts, is likely to double over the course of 2006.


This is the scenario that has many traditional players in the telecoms space scrabbling to acquire VoIP capabilities, and is also the reason fuelling rumours that Telecom Italia is poised to launch a buyout of AOL’s European operation.


Yet while VoIP is widely seen as a major threat to traditional telephone companies, JaJah’s founders believe that they will receive a cautious welcome from the likes of BT.


Calls through the service are routed largely via internet connections, but are connected to users’ phones over standard telephone lines, and to accomplish this JaJah buys call time bundles on the wholesale market. It may be driving prices down, they say, but unlike pc-to-pc calls, their model provides a revenue stream for the established players.

“Traditional telephone companies are facing the same situation that the music corporations did a few years ago. Services have emerged that provide the same product for free, and they need to find a way to combat this trend,” says Scharf. “They will realise that perhaps it would be better for them if JaJah did not exist, but at least we are paying them something. At the end of the day, they would rather have us than Skype.”

Source: Sunday Herald (Scotland)