Despite the fact that Infonetics Research expects the VoIP market to reach $82.7 billion by 2017, it doesn’t mean that simply offering VoIP service is enough to make a profit. Indeed, the research firm more recently pointed out that VoIP providers will have a more difficult time than ever going forward simply trying to meet demands. As such, it’s not wholly surprising that Telefonica has decided to shut down its Jajah VoIP service.
Jajah, which was acquired by Telefonica for $207 million toward the end of 2009, will continue to operate until January 31 of next year, after which point the service’s users will have to shop around for a new provider.
News of the shut down broke when Telefonica informed Jajah account holders that they will no longer be able to make calls through any of Jajah’s services, which includes the main Jajah site and Jajah Direct. However, according to Mobile World Live, the company did say that the Jajah platform is still running in support of other services, most notable its Tu Go over-the-top (OTT) mobile app.
The site also suggested that Telefonica has indeed had trouble generating profit from its branded Jajah VoIP service. This is in spite of the fact that Jajah seemed to have a promising future back when Telefonica purchased it as it boasted millions of users in 200 countries. Its business solutions, meanwhile, were also then used by thousands of small-to-medium sized businesses around the world. Clearly, things change.
Since 2009, Skype has further strengthened its position in the VoIP space, while also strengthening its financial position since it was acquired by Microsoft in 2011. A number of strong contenders, such as Vonage and Viber, have also sprung up in that time.
The emergence of WebRTC is also likely a factor since the technology offers the same basic functionality as Jajah and Skype but entirely within the Web browser, adding a level of convenience that is hard to compete with.