VoIP Companies Aim at IPhone Global Long Distance
VoIP companies hoping to win cost-conscious iPhone buyers last week pushed inexpensive global long-distance services sidestepping AT&T’s international plan. Jajah Inc. and Raketu Communications followed AT&T’s iPhone launch by pushing VoIP alternatives to AT&T’s World Connect service. AT&T adds $3.99 a month to users’ contracts for discounted per-minute rates, but callers to the U.K. still pay 8 cents a minute to dial a land line and 26 cents to a mobile number. Jajah and Raketu Web-based services charge less per minute with no monthly fee. To call the U.K., Jajah users pay 3 cents per minute to dial a land line and 18 cents for mobile, and Raketu users pay 1 cent and 12 cents. AT&T said it will not guarantee either long-distance option will work as well as the AT&T plan.
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AT&T charges a lot because “they have more mouths to feed and investors to satisfy,” said Don Thorson, Jajah’s global marketing vice president, terming Jajah a “small, growing company without much overhead.” AT&T may spend hundreds of dollars to gain a customer, but Jajah uses viral techniques costing less than a dollar a user, he said. Even without “bargain-basement” routing systems, Raketu keeps prices down, through good carrier deals and an efficiently designed P2P network, said Greg Parker, Raketu CEO. Raketu passes savings to users, trying to stay as inexpensive as possible and still make a profit, he said.
Jajah and Raketu undercut AT&T’s international plan by passing calls off as local, Thorson and Parker said. “Your phone and the phone you're calling think it’s a standard cell call,” Thorson said. Though seeming to cut into AT&T profits, Jajah is “telco-friendly,” he said. “The Jajah model recognizes the importance of the existing telco ecosystem and pays the telcos for the last mile… The telcos make money on every Jajah call.” And anyway, users need AT&T and other telcos’ services to access Web-based VoIP applications like his company’s, Parker said.
Jajah’s and Raketu’s RakWeb service needs no downloads, so users of iPhone and other mobiles can reach them through their phones’ Web browsers. Users log in to their accounts and enter two phone numbers: theirs and the one they want to call. The VoIP service calls both phones, which it connects using its own network in the middle and each caller’s last- mile carrier at the ends. The VoIP service pays the last mile carriers’ access fees; the user pays the VoIP service through an online account. It won’t matter whether iPhone customers use Wi-Fi or the slower AT&T EDGE network to connect. The Web is used only to set up the call, so call quality does not rely on Web connection speed, Thorson and Parker said. Still, an AT&T spokesman urged wariness of international long-distance alternatives, since the iPhone is optimized for AT&T, and only AT&T’s plan ensures call quality, he said.
Users may find dialing directly over AT&T’s network simpler than using Jajah or RakWeb, Thorson said, but price- sensitive users “comfortable with basic Web apps” should see the VoIP services’ advantages. Jajah and Raketu customers historically have been savvier technologically than others, but Thorson and Parker said the companies’ customer base is becoming more mainstream. Parker said he even has gotten letters from older people praising Raketu. Raketu will release a mobile version this month for iPhone, Symbian and Mobile Windows that is a downloadable application that provides one-button Web calling, Parker said. Users need only open the application and enter a number to call and the program will connect using Wi-Fi or the wireless network. EDGE and other 2G networks should suffice, since the service requires only a 33 kbps connection, he said.