Recognizing that more calling is going mobile, Vonage is announcing on Wednesday a new service designed to help it better compete against Skype and other rivals.
Time to Call is an iPhone app that allows users to make 15-minute calls to any of 100 countries for just a buck or two. Another 90 countries can be dialed for up to 15 minutes for under $10. The service is done on a pay-per-call basis with the money deducted form a user’s iTunes account as an in-app purchase.
“It will be the absolute easiest way to buy and make international calls,” Vonage CEO Mark Lefar told AllThingsD. The app works worldwide over Wi-Fi and in the U.S. and Canada over 3G (though data charges may apply for those on tiered plans.)
Although perhaps less simple than just using the iPhone’s built in phone app, the savings can be significant, Vonage says. The company says a 15-minute call from the U.S. to Mexico costs $2, as compared to nearly $10 on a typical wireless carrier. When travelling overseas, the savings can be even greater for those that have Wi-Fi access. The company notes that a 15 minute call from Japan to South Korea using Time to Call is just 99 cents as compared to more than $34 when made via a traditioal wireless call.
Lefar notes that three in five international calls are still made directly through a wireless or wireline carrier, typically at rates three or four higher than is necessary.
Of course, Vonage is not just competing with direct dial calling, but also a host of VoIP companies, including Skype, that have been faster to move to the mobile phone.
“Skype, the biggest name that is also in this space, came at it from a PC-to-PC space,” he said. “We’re meeting in the middle at mobile That’s where the battle will be fought over the next couple of years.”
Vonage plans to launch Time To Call simultaneously in the iTunes App Store in more than 80 countries, part of the company’s effort to expand into regions beyond the United States. Those who download the app will be able to try the service for free, with one free call to any of the 100 countries where 15-minute calls are priced at either 99 cents or $1.99. That, lefar notes, is the same as the cost of other impulse buys like a song or TV show.
Lefar said that, if the shift to mobile is a marathon, he thinks the industry is only at the quarter-mile mark.
Just last week, Vonage introduced another mobile product. That one, dubbed Vonage Extensions, is designed to allow the company’s home calling customers to make free calls using their mobile phones.
“It’s an extremely important part of our strategy,” Lefar said of the mobile efforts, which he called a key part of the company’s strategy. Vonage, he said, was near bankruptcy back in 2008 and had to refinance its debt in the middle of the financial crisis. Since then, he said, the company has managed to turn itself around as a profitable company with substantial cash flows.
“The focus now for the organization is really on growth,” he said.
Just how well Vonage is doing on that front should become clearer later on Wednesday, as the company reports quarterly earnings.