Los Angeles, California based Ringo announced a new cell phone application providing an international call service as a cheaper alternative to Skype that does not require an internet connection or 3G service. Each call is routed to a local landline carrier and then transmitted through cables under the ocean, and the signal is converted back to a local landline in the area of the call recipient. The cost is roughly 25 percent less than a comparable Skype call to a cell number. The service is currently available in 16 countries: United States, Mexico, United Kingdom, Australia, Brazil, Belgium, Canada, Switzerland, Netherlands, Germany, Italy, Singapore, Spain, Poland, Japan and Hong Kong.
The Ringo app works on iOS, Android and Windows smart phones. A significant feature of the app is the lack of internet connectivity as a requirement for use. Placing a call does not require a caller to tap into any cell service carrier data limitation and even works if no internet or wifi is available. Because the calls travel over land based lines, the call sound quality is high.
As an inducement to gain usage, Ringo is offering a special deal for subscribers making calls to US cell phones using its cheaper international call Skype alternative. Calls to the US mobile phones will receive an 80 percent discount under the new plan. The cost will be $.003 per minute using Ringo.
Ringo is led by CEO Bhavin Turakhia. He estimates that calls to the US use 35 billion voice minutes each year, the cost of which runs in the billions. He estimates that callers using Ringo could save at total of $1 billion each year if enough customers use the new service. Ringo is part of Directi, a large internet services company also run by Turakhia.
The services offered through the Ringo app will be a significant challenge for Skype. While Skype will likely remain the king for desktop to desktop communication in which both parties have an internet connection, Ringo provides more affordable communication to a cell phone on the other end. At this point, not enough people have used the app to know if in fact the service is as good as predicted. No doubt Skype executives hope that Ringo has some rollout problems and service issues so that direct price competition is not always warranted.
Ringo appears to offer significant advantages for those without 3G service and cell users with data plan limitations. The company has not announced when service to other countries will be available. At this point, service is limited between the 16 countries listed. Hopefully, more countries will be available for service soon. As the cheaper international call alternative to Skype when no internet connection is used, Ringo appears to tap into a useful communications niche. Mr. Turakhia is convinced that customers can save quite a bit on overseas calls and enjoy better service. If he is correct, Ringo could catch on in a big way. Skype users will be watching closely and may have an incentive to switch.
By William Costolo