Deutsche Telekom is investing $20-million in hotly tipped internet telephony start-up Jajah.com as the online communications industry continues its rapid growth.
Jajah has already been backed by venture groups such as Sequoia Capital — the Silicon Valley company that was instrumental in the rise of Google, YouTube and PayPal — and Intel. They are now joined by the German company, Europe’s largest telecoms company and owner of T-Mobile.
Jajah, which uses the internet to enable cheap or free calling on landline and cellphones, was founded in 2005 by Austrian entrepreneurs Roland Scharf and Daniel Mattes. The duo, who have since moved to the United States to develop their product, welcomed the latest addition to their third round of funding.
Mattes said he aimed to follow Skype, the British start-up bought by eBay in 2005 for $2,6-billion. “Our goal was to have one million users after a year, because that was what Skype had,” he said. “In fact, we had two million users in a year. We’re very excited.”
The voice over internet market has made a great impact on landline telephony, and the mobile market for such services has become increasingly competitive over the past year.
Skype, the leading brand, has taken a much more conservative approach in mobile than it did with fixed-line operators, using partnerships with existing providers rather than challenging them directly. The result has been a perceived gap in the market, resulting in a host of new companies that believe they can cash in with big savings for customers.
Norwegian entreÂpreneur Hjalmar Winbladh was one of the first to spot the opportunity with his company, Rebtel. He says that by enÂabling users to make global calls with the hundreds of minutes included in their calling plans, such companies could revolutionise the market, turning international calling into the same sort of commodity as local calls.
Mobile firms often prevent their phones using the technology.
“Entrepreneurs believe that eventually consumer demand will prevent networks from suppressing such systems, with regulators already working to push down the excessive costs of international roaming,” he said.
Analysts say it will be difficult to replicate the successes found in the fixed-line business. “European telecoms firms are very aware that the world is changing — unlike their competitors in the US — so all of them are embracing voice over internet,” said Ian Fogg, an analyst with Jupiter Research. “So it’s a very, very competitive market.” — Â