Deutsche Telekom invest in web-activated telephony provider JaJah
Source: solokay.blogspot.com
Deutsche Telekom through its T-Online Venture Fund has invested in Jajah but the actual stake in the company was not disclosed. This is coming just weeks after the microprocessor giant Intel invested close to $20 million dollars in Jajah. In recent months web activated services provider by companies such as Jajah and Retel have gained a great deal of attention and telcos / investors are taking note.
This is an early example of a traditional telco taking a stake in an Internet player and means that DT can start to use JAJAH’s communications features embedded in new web-based applications. It will certainly be interesting to see what emerges from DT’s new involvement. But we think there may be secondary reasons why DT is pursuing this line.
DT through T-Com was relatively late launching its own VoIP offering (March 2005) and only introduced flat-rate pricing in November 2005, following its competitors in the German market. We believe it has struggled in relative terms since then and that other players such as Skype and its other main broadband competitors are more strongly positioned in VOIP overall. DT, in common with all other major fixed-line telcos, is feeling the pain of fixed-line loss and call revenue loss to VoIP as well as other factors such as fixed-mobile substitution (FMS). Since calls made with JAJAH rely on traditional fixed and mobile services, those calls made to T-Com and T-Mobile numbers using JAJAH can still benefit DT through call origination and termination revenues. Promoting JAJAH will therefore have an indirect benefit for the DT Group and will help to defend against the march of other low-cost players. Playing the numbers game and promoting alternatives such as JAJAH, while learning more about their potential in a converging world is a good move.
VoIP has come to stay and for telcos its now a case of if you can’t beat them you join them.
