Telefonica to Wind Up Jajah - Analyst Blog
2013年12月5日 - 6:00AM
Zacks
Spanish telecom behemoth
Telefonica (TEF) has decided to close its U.S.
based VoIP (Voice over IP) subsidiary Jajah by the end of Jan 2014.
The shutting down of Jajah comes close on the heels of Telefonica’s
decision to scrap its free messaging application Tu Me. Created in
2005, Jajah is an Internet voice service provider that allows
subscribers to make international calls via its website. It also
allows customers to set up calls internationally, while using a
local number.
Closure of VoIP service means that
customers will not be able to make calls via its website Jajah.com
or through Jajah Direct. Accordingly, registrations of new accounts
have also been stopped. Existing customers can send a request for a
refund of their outstanding balance.
The Spanish behemoth acquired Jajah
for $207 million in cash – a value much higher than the set up
costs. Back then, Telefonica was in an expansion mode and acquired
Jajah to combat challenges posed by VoIP giant Skype.
Neither Telefonica nor Jajah
divulged any reason behind the closure. However, the general belief
is that the company is struggling against the likes of free VoIP
alternatives such as Viber and FaceTime. The wrapping up may also
be an attempt by Telefonica to promote its very own voice and text
app Tu Go.
Further, higher penetration of
smartphones has popularised the use of instant messaging
applications like Whats App and WeChat. As a result, paid VoIP
service providers like Jajah have clearly lost their shine.
We believe the high purchase price
of Jajah and the subsequent closure of the business points out the
faulty expansion strategy of the Spanish giant to integrate itself
with future technologies.
Telefonica currently carries a
Zacks Rank #4 (Sell). However, some better-ranked stocks within the
sector are Hawaiian Telecom Holdings Inc. (HCOM)
Shenandoah Telecommunication Co. (SHEN) and
Chunghwa Telecom Company Limited (CHT). HCOM and
SHEN carry a Zacks Rank #1 (Strong Buy), while CHT holds a Zacks
Rank #2 (Buy).
CHUNGHWA TELECM (CHT): Free Stock Analysis Report
HAWAIIAN TELCOM (HCOM): Free Stock Analysis Report
SHENANDOAH TELE (SHEN): Free Stock Analysis Report
TELEFONICA S.A. (TEF): Free Stock Analysis Report
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