Jego aims to challenge Skype by offering overseas VoIP services

China Mobile Ltd, the world's biggest telecom operator by subscriber base, has developed a new application called Jego to challenge rivals such as Microsoft Corp's Skype service.

The app mainly targets overseas customers, allowing them to make free or low-cost calls to mobile phones and landlines. Jego was launched on June 1 and can be used on mobile devices running Apple Inc's iOS operating system or Google Inc's Android platform.

Analysts see China Mobile's move as "a necessary step to explore the international market".

Because of the prices of long-distance calls, an increasing number of customers have switched to voice over Internet protocol, or VoIP services, thanks to the efforts of companies such as Skype, said Fu Liang, an IT industry insider in Beijing.

Due to their huge number of users and sound networks, Chinese telecom carriers have a chance to grab market share from existing market players, Fu said.

China Mobile International Ltd, a China Mobile fully owned subsidiary based in Hong Kong, is responsible for operating the Jego service.

Derick Li, a business development manager at CMI, was quoted as saying in a Next Web report that Jego targets international users, namely anyone that needs to stay in touch with friends and family in China.

In addition, Jego provides free in-app text messaging along with other standard features, such as push-to-talk voice messages, photo sharing, video calling, and a multimedia-sharing function.

In the Chinese market, VoIP calling on Jego from China - if people sign up with a Chinese phone number - to a Chinese landline or mobile phone is not available. This is because Chinese authorities forbid VoIP calls. Therefore, domestic users can only use the messaging and Jego-to-Jego calling services.

Skype's pay-as-you-go calls to China cost around $0.026 per minute (including taxes) in addition to a $0.049 connection fee. Jego will cost $0.022 per minute.

Meanwhile, Jego offers unlimited calling to the Chinese mainland for $15.99 a month or to Hong Kong for $11.79 a month.

Xiang Ligang, a Beijing-based telecom expert, said that the revenue contributed by Jego is going to be limited, because the new business is still "a small one".

"We see Jego as a creative application which will increase customers' loyalty and extend China Mobile's global reach. However, it's unlikely to have a big influence on the carrier's financial performance," Xiang said.

Like many other telecom operators worldwide, China Mobile faces declining growth rates in terms of net profit, largely due to strong challenges from Internet companies such as Tencent's Wechat service, which attracted more than 300 million users in two years and has hit China Mobile's voice and messaging business.

Rumors are circulating that China Mobile plans to revive its Fetion service to combat Wechat. Jego, at the same time, may impose some pressure on Wechat since it also provides similar video calling and messaging services.