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Rumor: O2 Wins Race to Buy Jajah

Ray Le Maistre
12/21/2009

Reports from the Israeli media suggest that European mobile operator Telefónica Europe plc (O2) has won the race to buy VoIP service provider Jajah Inc. for about $200 million.

Israeli business site TheMarker reported Sunday that O2 has beaten Cisco Systems Inc. (Nasdaq: CSCO) and Microsoft Corp. (Nasdaq: MSFT) to acquire the Mountain View, Calif.-based company, which enables people to make low-cost or free voice calls using their regular fixed line or mobile phones as well as Internet-connected devices such as PCs. (See Jajah Gives Twitter a Voice and Jajah Expands VOIP.)

O2 declined to comment, while Jajah had not responded to a request for comment as this article was published.

Jajah, which launched in 2006, says it has more than 10 million users worldwide, and counts Microsoft, Japan's EMobile Ltd. , and Yahoo Inc. (Nasdaq: YHOO) (which uses the service for its Yahoo Messenger offering) amongst its customers and partners. (See Japan Gets IP-Telephony, Jajah Offers Free Calls, and Jajah Offers VOIP.)

Jajah has raised about $33 million since it was founded in 2005, according to Crunchbase. Its investors include Deutsche Telekom AG (NYSE: DT)'s T-Online Venture Fund, Intel Capital , Sequoia Capital , and Globespan Capital Partners . (See DT Invests in Jajah and Jajah Raises $20M.)

The move makes sense, according to the findings of a recent Unstrung Insider report, "Mobile VoIP: A Disruptive Service Goes Mainstream." That report found that "mobile VoIP is an unstoppable train due to consumer demand for less-expensive mobile services" and predicted that mobile operators "are likely to collaborate or even outright acquire some of the upstarts to put their hands on experience and proven technology." (See Mobile VoIP's an 'Unstoppable Train' .)

— Ray Le Maistre, International News Editor, Light Reading

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