O2 to buy Israel's Jajah for $200 mln -report

JERUSALEM Dec 20 (Reuters) - Israeli start-up Jajah, which allows users to make international phone calls via the Internet, will be sold to Telefonica's (TEF.MC) mobile phone unit O2 this week, TheMarker financial news website said on Sunday.

Jajah officials could not immediately be reached for comment.

Last month, TheMarker reported that O2 was bidding against Cisco (CSCO.O) and Microsoft (MSFT.O).

Jajah allows its 15 million subscribers to make cheap phone calls to 125 countries by connecting their call directly to their landline or mobile phones through its website.

It has raised $35 million from Deutsche Telekom AG (DTEGn.DE)>, Intel Capital, a unit of Intel Corp (INTC.O), Sequoia and other venture capital funds since its founding in 2005.

Users of its Internet voice calls technology include Yahoo Inc (YHOO.O) and Microsoft.

(Reporting by Steven Scheer; editing by John Stonestreet)