Sunday, March 26, 2006

Side effects of venture capital

Ready or not, the beleaguered and bloodied telecommunications industry must now analyze and assimilate a new species of predator in Jajah, a Luxembourg-based VoIP service provider that threatens everyone including Skype, a member of its own species.

Jajah made its official entry into the telecommunications jungle with the news that Sequoia Capital, a prominent venture capital firm with deep roots in the telecommunications industry, invested $2 million in the company.

Because using Jajah’s VoIP system does not require the user to download any software, à la eBay’s Skype, or to acquire any hardware, à la Vonage, the $2 million could go a long, long way.

To use Jajah’s system, users need only have a telephone number, either fixline or mobile. They type in their phone number and the phone number they want to call on Jajah’s web site. They then press a big green call button and Jajah will then call the two numbers and route the connection over the Internet.

I am dreaming of Jajah kiosks all over Africa - people walk up, input the info and presto - the economic development begins: small villages, churches, health centers. Maybe even a roving mobile unit.

ITU should be watching. Grameen should be watching.

Telecoms should be watching their power base slide, slide away.

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