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Jajah Touts No Frills Wireless VOIP

VOIP service provider Jajah Inc. plans to move away from its mostly PC-based service and onto mobile phones in the next few months, according to the company’s CEO, Roman Scharf.

The Mountain View, Calif.-based startup differentiates itself by not forcing folks to stay connected to their PCs while talking to friends, relatives, etc. Callers use the Jajah Web to initiate calls, but the service calls and connects both users on their regular landline phones. “People are comfortable with their phones; they use them everyday,” Scharf says.

Also, the service can be used without downloading any software client to the PC. It's all done via the Web browser.

Soon it will go a step further by taking the PC out of the mix altogether. Scharf explains that his company will create a piece of Java software that can be downloaded by Web-enabled phones. This code will allow that phone to set up and participate in Jajah calls. (See Spirit Tackles Mobile VOIP.)

Most Web-based services are now finding their way onto the small screens of cellphones, but this particular service might hurt the long-distance businesses of the operators that subsidize those phones. “Whenever you need to make a long-distance call or an international call, just switch over to Jajah mode and it’s much cheaper,” Scharf says. (See iSkoot Connects With Skype.)

Until March, Jajah was just another PC-based VOIP service like Skype Ltd. (eBay Inc. (Nasdaq: EBAY)) and Google (Nasdaq: GOOG) Talk. But Scharf says he had a moment of clarity when market research suggested that 97 percent of computer users still don’t use PC-based VOIP services. Then the company reworked its service to allow for folks to use regular phones -- even though the calls themselves are carried over the Internet.

Once a call is initiated at the Jajah site, the Jajah “termination server” places a call to each party, then connects the calls together. Jajah operates 200 of these servers in 85 countries.

The same process will take place when a mobile handset is being used to initiate the call. The cellphone users on each side will be charged by their providers for what appears to be a local call -- even if they are using the Jajah service to connect to a foreign country. And, as with the PC-based service, most of the call will route through the Internet, connecting to the PSTN only when necessary.

Scharf says his company has low overhead and is making its money from fees for VOIP calls and text messages. But the company, once it gets users hooked on its telephony services, will start rolling out higher-margin services (conference calling, etc.) as time goes on. He expects Jajah to hit break even toward the end of this year.

The traditional phone companies are totally left out of the mix here. For that last-mile PSTN connection, Scharf says his company buys high volumes of minutes from wholesalers like Global Crossing (Nasdaq: GLBC), AT&T Inc. (NYSE: T), and Level 3 Communications Inc. (NYSE: LVLT), and recoups the money (and a small profit) through small fees to Jajah users.

But what the phone companies will soon be missing is the higher charges they could collect from international calls, especially those placed by cellphones.

It's also worth noting that investors are standing behind Jajah's leap from PC to regular phones. The company received a $3 million infusion at its launch in October 2005 from Sequoia Capital and another investment of $5 million from Globespan Capital Partners in March.

The company now employs 50 people, Scharf says.

— Mark Sullivan, Reporter, Light Reading

Gabriel Brown 12/5/2012 | 3:48:48 AM
re: Jajah Touts No Frills Wireless VOIP There are quite a few these type services around GÇô you really can save a lot of money on, say, a 45 minute international conf. call.

Juvinio is another good one. ItGÇÖs a little Java app that automates the dial out to the 3rd party provider and routes your call to number you really wanted.

There are some Skype Out services that work with your mobile (by calling you back), but your computer needs to be left running at home/work. Having a service like Jajah handle the call would be better.

Termination rates to mobiles are still quite high in Europe. Maybe regulators will force prices down.
alchemy 12/5/2012 | 3:48:41 AM
re: Jajah Touts No Frills Wireless VOIP Mark Sullivan a ecrit:
Roman Scharf says he thinks voice prices for domestic and international calling will continue moving toward zero, in part because of applications like Jajah. He says companies will have to learn clever ways of integrating voice into other apps/services and stop relying on it as a revenue source. Whither Vonage?

I think domestic calling will simply end up being all-you-can-eat for a fixed fee. As service providers worldwide set up peering relationships, adding international will become an add-on. It won't be to all countries since some will regulate such things into oblivion. The MSOs are at $40/month. Vonage is at $25/month. I'd expect those to be the price point for int'l all-you-can-eat in a few years since the incremental cost to the service providers will be so low. All-you-can-eat domestic will decline significantly (nearly free?) when bundled with an integrated cellular telephony product, video product, and internet data product. With fixed-mobile-convergence deployments, I'd imagine that you'd get free cellular service when you call from home over your WiFi & today's free on-network anytime and free nights & weekends deals with metered service during prime midweek calling hours.

Vonage can't compete against this bundled service strategy and will vanish completely. It's going to be telcos against the MSOs unless both have their internet data products regulated to offer 3rd parties access to QoS and multicast facilities.
Mark Sullivan 12/5/2012 | 3:48:41 AM
re: Jajah Touts No Frills Wireless VOIP Roman Scharf says he thinks voice prices for domestic and international calling will continue moving toward zero, in part because of applications like Jajah. He says companies will have to learn clever ways of integrating voice into other apps/services and stop relying on it as a revenue source. Whither Vonage?
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