VOIP – The Details Kill The Fun

A bunch of VOIP services have launched to help people make cheaper calls from normal phones. None of them are compelling for the mass market.

VOIP is great when you initiate calls from VOIP phones or software (Skype, Vonage, etc.). These VOIP networks can call other VOIP phones, or patch into the normal telephone networks to make relatively inexpensive calls. Vonage long ago replaced my normal telephone service, and an increasing number of people are using VOIP solutions instead of a normal telephone.

But a new crop of companies have a launched that are trying to let people make free or cheap VOIP calls from a normal POTS (plain old telephone service) phone (often a cell phone) to another POTS phone. If someone gets it right, there’s a huge market out there to destroy. The problem is that no one has gotten it right. And the mass market won’t adopt these services until they are dead simple to use.

These services generally take one of two approaches to allow people to make VOIP calls. One approach is to tell the service what number you are calling from and what number you would like to call. The service then calls both parties and connects them. The second approach is to assign special phone numbers to use instead of the normal phone number. These special numbers are controlled by the VOIP service and bypass the POTS system for the most expensive parts of the call.

Neither approach allows people to make quick calls on the fly to someone. Both require multiple steps to make a call, usually involving the use of a website as well (meaning you have to be at a computer or try to access the services via a mobile browser).

Here are a few that we’ve been tracking:

Jajah: Go to the website, tell it your phone number and the number you want to call, and a call is initiated to both phones. Call rates are very cheap, sometimes free. But you have to be at your computer to use it, and have a billing relationship with jajah if you are making non-free calls. They have some big news coming out this week, however, that will be worth noting.

Rebtel: We first covered Rebtel here. They just announced a whopping $20 million in venture funding. Rebtel has an extremely confusing method for making calls. The basic fee is $1 per week. They then assign local phone numbers for each of your friends. You call that number instead of the normal number for that friend. Your friend picks up the phone, hangs up and dials the number that just called them to connect to you. The call is then free. If that wasn’t clear, you can see the instructions here. You can also use Rebtel without the person hanging up on the other end, but you will be charged for the call (rates are lower than normal phone rates).

Hullo: We covered Hullo here. Very similar to Jajah, with slightly better features.

ConnectMeAnywhere: Sam Sethi wrote about ConnectMeAnywhere on TechCrunch UK. Like Rebtel, ConnectMeAnywhere assigns local numbers to your contacts, and you use those local numbers instead of their normal phone number. Unlike Rebtel there is no free option where the person hangs up and calls back. Instead, CMA just charges a lower rate than your phone company does. Their rates are here.

None of these services is good enough to change user behaviors in the mass market. Having to be at your computer, or call special phone numbers, is too much trouble for most people. Certainly forcing the person receiving the call to hang up and call back isn’t very attractive. And traditional POTS rates continue to fall fast, meaning the incentive to go with a hard-to-use VOIP provider is lower.

We’ll monitor new services as they launch, of course. And perhaps someone will come up with a better solution. Until then, I’m not betting on any of the current crop of companies.