T-Mobile Parent Invests in Upstart Jajah
Posted on: Tuesday, 29 May 2007, 12:00 CDT
By PETER SVENSSON
NEW YORK - German telephone company Deutsche Telekom AG, the parent of T-Mobile, said Tuesday it has invested in Jajah, an upstart firm that lets customers bypass long-distance fees by connecting their calls over the Internet.
The venture funding arm of Deutsche Telekom joined computer-chip maker Intel Corp. in leading an investment round totaling $20 million. Intel's participation was announced earlier this month. The specific amount invested by each participant in the round was not revealed.
Founded in Austria in 2005, Jajah has emerged as the third model of Internet calling, also known as Voice over Internet Protocol, or VoIP. Users go to the company's Web site and enter two phone numbers - their own and the number they want to call. The company calls both numbers. If the calls are answered, Jajah connects them to each other, making it a high-tech version of the long-distance calling card.
Calls are free between Jajah users in many countries. Other calls cost about 3 cents a minute.
Other VoIP businesses, like eBay Inc.'s Skype service and Vonage Holdings Corp., generally don't involve the user's wired or wireless phone, relying on a broadband connection to carry the call to the outside world.
"We see ourselves as a carrier-friendly company," said Jajah Chief Executive Trevor Healy. In contrast to Skype and Vonage-type applications, the existence of Jajah encourages people to keep their fixed lines, he said. In addition, Jajah pays carriers to terminate calls on their networks.
When Jajah is used with cell phones, the carrier may miss long-distance fees, but at least the user is consuming cell-phone minutes.
For a carrier, "the best company to invest in is one that doesn't attack their fixed-line business," Healy said.
As part of the investment deal, Jajah will pay reduced fees to connect calls to Deutsche Telekom subscribers.
The investment by Intel's venture arm "will be used to accelerate the development of next-generation communication solutions on a global scale," according to Intel.
Healy said Intel will be looking at including VoIP capabilities on the chip level of future PCs. That could mean PCs that can be used as Internet phones, even when they're turned off, he suggested.
Jajah has more than 2 million registered users around the world, of whom 40 percent are in the U.S., according to Healy. The company recently moved its headquarters to Mountain View, Calif. It was initially funded by U.S. venture capital firm Sequoia Capital.
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On the Net:
http://www.deutschetelekom.com
Source: Associated Press/AP Online
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