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Last Updated: Tuesday, 29 May 2007, 08:59 GMT 09:59 UK
Deutsche Telekom backs VoIP firm
A T-Mobile store in London
T-Mobile has a mobile phone that can make VoIP calls
Deutsche Telekom is investing in the internet telephone company Jajah, joining the rush of major telecoms groups to back the technology.

Jajah provides voice over internet protocol (VoIP) services, which allow people to make calls over the internet at a fraction of the usual prices.

Telekom is investing through its investment arm T-Online Venture Fund.

Other big firms have introduced their own VoIP offerings, but Telekom is the first to back a third-party offering.

Intel's investment arm made a similar investment earlier this month.

T-Online Venture Fund chairman Andreas Kindt said in a company statement: "By investing in companies like Jajah, we will be able to continue to bring users around the world the innovative solutions they are looking for."

Threat to revenues

VoIP technology allows users to make calls either via their computers or using mobile phones if they are in an area with a wireless broadband network.

As a result, most traditional telephone companies and mobile operators see it as a threat to their revenues.

Last week, Deutsche Telekom's mobile arm launched a smartphone in the US called the Wing, which allows users to make VoIP calls in areas with wireless internet.

Deutsche Telekom says it has now started embedding Jajah into its web properties and that it expects to offer its calling services to consumers and businesses in the future.

Another big VoIP player, Skype, was bought by the online auction site eBay in a $2.6bn (1.4bn) deal in September 2005.

Deutsche Telekom's move comes at a time when the firm is facing a decline in demand for its traditional fixed-line telephone services.

Earlier this month, it reported a 58% fall in three-month profits, after more than half a million customers left its fixed-line business to join cheaper rivals.

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