Last week’s announcement of Google Voice was a shot across bow of the telecommunications industry. While Verizon and other carriers will experience pricing pressure on some of the add-on services that they give customers, companies that provide Internet-based voice-over-IP (VOIP) may be most threatened by Google Voice, which will let users make calls within the U.S. at no cost, and international calls at an inexpensive rate.
Take Jajah, an Internet telephone service that recently scored nearly US$2.8 million in a round of funding. Jajah uses VOIP to connect landlines and mobile phones at a low cost.
Investor and entrepreneur Paul Kedrosky predicts Google will have the same impact on Internet telephony as the company has had on search engines.
While Jajah’s investors may be optimistic, Google’s entrance means “there’s not too much landscape left in terms of universal telephony,” he told The Industry Standard.
Kedrosky believes that Jajah’s best asset is its grasp over certain geographic regions in Asia. As an existing player, they have a chance to keep the market they have. “The challenge is you’re trying to arbitrage ever cheaper calling rates,” Kedrosky said.
Still, he thinks Google will prevail.
“It’s going to be very hard to get venture funding in this area now,” he said. “It would be a mistake to say it’s because it’s Google. They’ve failed many times, but this is incredibly well done.”