Personal tech: Ring ka-ching

Startup Jajah is going after VOiP giant Skype with a combination of lower prices and no software.

Skype, the Internet phone service acquired last year by eBay for US$2.5 billion, has a new challenger. Jajah, launched a little more than 12 months ago, offers the same basic benefit ? cheap or free long-distance calling ? but unlike Skype, Jajah doesn't require users to download software or plug a telephone headset into their computer. You use your regular phone. The company calls Jajah the first web-activated telephony service.

Here's how it works. After becoming a Jajah member by setting up an account at the company's website (, you enter the telephone number of the person you want to call in the box provided on the main Jajah page. When you click the Call button at the bottom of the page, there's a pause of sometimes a few seconds, then your phone rings. You pick it up and hear a recorded message saying Jajah is now completing your call. The phone rings at the other end.

It's so simple your grandmother could do it, which was precisely Jajah's objective. And it works, most of the time. In my testing, more than 95% of calls went through. There is some latency, or delay, in voices reaching each other. It's not enough to seriously impede conversation, but you might more often find yourself talking over each other. Voice quality is similar to regular phone calls.

Jajah lets you make free calls to other members if they're in Zone 1, which includes land line and mobile phones in Canada, the U.S., China, Hong Kong and Singapore, or Zone 2, land lines mainly in Europe. For other calls, you pay anywhere from 7.5¢US to 65¢US a minute. You don't have to give a credit card number when you sign up, though. Jajah allows you a 63¢US credit to get started. When that runs out, you have to set up a payment method.

The company has 220 phone switches, which it calls “termination points,” in 85 countries around the world ? computers in leased facilities running Jajah's voice-over-Internet protocol software. When you click the Call button, Jajah places a call to you over the public switched telephone network (PSTN) from the termination point nearest to you. When you pick up your phone, it places a call to the other person from the termination point nearest them, also over the PSTN. Then it patches the two together over the Internet.

How does the company make money? For now, about 85% of Jajah's one million users make paid calls. Ample margins on paid calls make up for the free ones. Jajah is also counting on its premium paid services. You can very simply make conference calls with up to 10 participants. You'll pay the sum of the per-minute rates for calling each participant. The trick is you pay even for member participants ? but only 2.5¢US a minute in Zones 1 and 2. A call with four other participants costs as little as 10¢US a minute, which is unbeatable, says Roman Scharf, Jajah's co-founder.

The company recently introduced Jajah Mobile, which allows users to call from mobiles. They have to download and install a piece of free plug-in software. Jajah so far has software for only some Motorola, Nokia, Samsung and Sony Ericsson phones, but says it will add plug-ins for others by year's end. In some cases, you'll need a data plan from your cellular provider. The free calling rules apply, but Jajah hopes to get more revenue in Europe because users have to pay to call cellphones there. Scharf believes that Jajah has almost as many paying customers as Skype, and expects to hit two million users by Q1 2007. Did eBay maybe make its move too soon?