VoIP Company raise $20m to expand services

Swedish company, Rebtel have acquired $20m in VC funding to expand its services. International calls from a mobile will be considerably cheaper than making the same call using the mobile operators.

A quick explaination of how the service works:

For each contact number a customer enters on the Rebtel Web site, the company creates a local phone number the contact can call. So if a Rebtel user in Paris enters on the Web site the cellphone number of a friend in San Francisco, the person in Paris will be given a local number to call, and a San Francisco number the friend can call. To avoid the per- minute cost, the customer in Paris calls his or her local number, the person in San Francisco answers, then hangs up and calls back his local number.

Mobile company, T-Mobile remain sceptical about the service. Klaus Czerwinski, a spokesman for T-Mobile said, "We don't think this will be any more successful than other new services where you have to do several steps to make a phone call," "People prefer simplicity."

However, a small operation like Rebtel has the oppourtunity to make a huge impact in the mobile market as co-founder Hjalmar Winbladh explains, "For us, getting $1 a week for unlimited calls is a good business, but for somebody like T-Mobile, it's bad business because of all the costs the company has," We are an organization with 20 people - our entire cost base is probably less than what it costs T-Mobile to run the reception in their headquarters."

http://www.benchmark.com/news/europe/2006/10_02_2006.php