Jajah signs up 2 million Web callers in first year

SAN FRANCISCO (Reuters) - Jajah Inc. said on Monday it has signed up 2 million callers for its Web-based long-distance phone service in the year since it was introduced, growing 66 percent in just the last three months.

The privately held company, founded by two Austrian programmers who have relocated to Silicon Valley, also said it had hired Trevor Healy, former head of the merchant payments business at PayPal Inc., as Jajah's new chief executive.

Jajah, which now counts 50 employees, is one of a new class of companies that are slashing the cost of making phone calls globally for consumers who sign up over the Web. It received $6 million from venture capital firm Sequoia Capital in 2005 and another $3 million from Globespan Capital late in 2006.

Jajah allows consumers to place international or long-distance telephone calls -- for free, or at a fraction of conventional prices -- on existing mobile or land-line phones, using the Internet to bypass steep carrier toll charges.

Such companies have evolved from older dial-around calling-card phone services. New Voice-over-Internet services have emerged with names like Grand Central, Jangl, Jaxtr, Rebtel and Roam4Free that offer various twists on the theme.

Jajah (www.jajah.com), which draws customers from 55 countries, has seen its customer base grow to 2 million from 1.2 million at the start of 2007, officials said.

"What we are finding is it is a viral numbers game ... the more registered users, the more calls get made and the more new users become aware," Healy said in an interview.

Healy, an Irish native who now lives near San Francisco, was co-founder of CelNX (Cellular Network Exchange), one of the first companies to offer consumers a way to add prepaid minutes to mobile phones over-the-air. CelNX became part of VeriSign, which eventually sold the business to eBay Inc.'s PayPal unit.

On average, a paying Jajah user spends about $10 a month and about $100 a year, the company previously disclosed. While calls between Jajah users are free, 85 per cent of users pay to call others in countries where small call charges apply.

A big selling point for Jajah is that the service operates on standard phones. It works by making local calls at either end of a conversation and connecting them over the Internet.

Calls between two registered Jajah users are free.

A call by a registered Jajah user from a landline in England to an unregistered landline phone in Singapore, is 3.1 cents a minute. The same call over mobile phones costs 18.2 cents a minute, according to rates published on Jajah's site.

Healy said Jajah plans this year to expand its low-cost mobile phone service offerings. It also is looking to expand into the small business communications services markets, building on the roughly 8,000 businesses already using Jajah.

It plans to add click-to-call buttons that users can embed on any Web site or social network profile to allow callers to call from their computers. It also aims to streamline its site to become more accessible to mainstream callers.

Healy, aged 35, said Jajah engineers are also studying ways to bring Voice over Internet Protocol (VOIP) to Web users without high-speed Internet connections, he said.

"We are looking at some disruptive ways we can bring VOIP to customers that don't have broadband at the moment," he said, adding that the product could take the form of a device or come embedded in a cable television set-top box, for example.

Rather than building hardware itself, Jajah would seek to license technology to set-top makers, taking the strategy Intel used to get its chips used in personal computers, Healy said.