O2, the mobile arm of Telefonica Europe, appears to be the winner of a bidding war for voice over IP start-up Jajah, according to a report on TheMarker that Reuters is citing.
O2 is expected to buy Jajah this week for $200 million, according to a report on the Hebrew language news site. Cisco Systems and Microsoft were rumored to have been competing for the VoIP start-up.
Jajah representatives did not immediately respond to requests for comment.
Jajah, which provides low-cost international calling to more than 25 million users, already has the ability to terminate calls or transfer calls from the Internet to the local telephone network in more than 122 countries around the world.
In September, the company launched a beta for a third-party offering that allows Twitter users to make voice calls directly to each other through the microblogging service. The company announced in June that it had connected its 1 billionth call.
The Internet phone company has raised more than $30 million in funding, including a $20 million round of investment lead by T-Online Venture Fund, the investment arm of Deutsche Telekom. Other investors include Intel Capital, Sequoia Capital, and Globespan Capital Partners.
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Jajah)
Internet phone company Jajah can turn the iPod Touch into an iPhone. (Download from CNET Download.com.)
The company, which competes with other low-cost Internet calling applications such as Skype, announced Thursday a new application that will allow Touch users to call and text messages using a voice over IP network instead of a carrier's cellular network.
All that is needed to start making calls is the Jajah application, the latest version of the iPod Touch, a microphone headset, and a Wi-Fi connection. While the Jajah service can reduce calling costs up to 98 percent, the fact that it must be connected via a Wi-Fi network limits where it can be used. For this reason, it's unlikely that the Jajah-enabled Touch would really steal business away from the iPhone, which is a full-fledged mobile phone that operates over a traditional cellular network.
Jajah plans to sell the application as a "white label" service. This means that it will license the application to wireless operators and non-wireless operators who offer it under their own brand instead of a standalone Jajah application. It's unlikely the service will be offered for free. Instead, service providers might offer the application for $10 a month.
The application could be very useful for iPhone users too, especially those wanting to make low-cost international calls from their iPhones. But it's not clear yet whether Apple would allow the application on its App Store, since it essentially bypasses the carrier network. Skype, which also provides free and cheap Internet calling, is not available on the App Store. That said, iPhone users can access Skype functions and users through other applications such as Fring and Truphone.
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