While the international part of the call is free, the caller and recipient still may have to pay for local calling minutes determined by their mobile phone plans. The app runs in the background and will intercept users making a more expensive long distance calls by automatically converting the number to a cheap local number. So when the user dials an international number from the native Android dial pad, or selects a contact with an international number from the address book, the call is automatically intercepted and routed via Rebtel instead of their carrier. Also since Rebtel works on the standard cellular network using local phone numbers, no WiFi is needed to make calls.
Rebtel’s us reporting a 100% jump in revenue grew in the first half of 2010 compared to the same period last year, increasing revenue from $8 milllion to $16 million. Rebtel’s annual revenue run rate is just over $40 million, and the service has logged more than one billion minutes in international calls. The company also just acquired Talkster earlier this year.
But Rebtel faces a formidable competitor in the VoIP space: Skype. Skype’s share of international calling minutes and traffic are growing rapidly. And Skype’s quarterly revenue is a whopping $185 million.