Telephony giant backs VoIP client

Deutsche Telekom has become the first major telecommunications provider to back an external VoIP company through its investment in Jajah.

The move follows the company's announcement earlier this month that it had seen profits for the last quarter drop by 58 per cent and it is therefore likely to be seen as an acknowledgement of the impact of VoIP on the market.

Jajah will receive the investment through Deutsche Telekom's venture capital arm T-Online Venture Fund, which hopes to offer the VoIP technology to its customers.

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."

Deutsche Telekom's investment in VoIP is indicative of the rapid decline in demand for traditional fixed line services, which has seen the German company lose half a million of its customers to cheaper rivals.

In contrast, use of VoIP technology has grown to the point where nearly one fifth of UK internet users say they regularly use it to make cheap or free calls over the internet.