VoIP provider Jajah has cut calling rates between the UK, India and North America.

The new rate, effective today, drops the price per minute of a call from $0.089 (£0.043) to $0.073 (£0.035). Jajah is also offering free minutes to customers who refer new customers to its network.

Founded in 2005, Jajah also has other plans in the works to entice more users to its service, said Roman Scharf, Jajah’s CEO and co-founder. By October, Jajah plans to allow free calls for its members in the US and European markets as part of a new business model, Scharf said. Jajah has developed a new business model that will make businesses pay for those free calls available to users, but Scharf said he could not detail how that plan will work.

A large number of families in India have relatives working in other parts of the world, particularly in the UK and US. Tapping into large dispersed communities such as Indian helps Jajah, as most of its growth has come through word-of-mouth, Scharf said.

About 71 percent of Jajah's new users are those who have received calls through the Jajah service, Scharf said. “Three out of four people who have joined Jajah have heard about Jajah from friends,” he said.

Jajah, with over 3 million [m] subscribers, offers a VoIP phone service that originates and terminates calls on standard PSTN (public-switched telephone network) and mobile phones. On Jajah's website, users enter the number they want to call and their own phone number, then their own phone rings, and the call is connected.

Since the service is enabled through a website, users do not have to buy additional software or hardware, Scharf said.

The company, founded in 2005, also plans to introduce a version of its service by the end of 2007 that will allow customers to access Jajah with a standard phone without an internet connection.

Increasing the number of subscribers in India will give Jajah a better bargaining position with Indian telecommunications services providers and will also help it introduce its free calls business model in the country, Scharf said. Currently, more people call into India using Jajah than call out, he added.

Scharf said Jajah doesn't threaten traditional telecommunications service providers since Jajah pays the companies to connect those calls.

“We put money in the telcos pockets,” he said. “We wouldn’t have a fight with the telcos because they are established and strong.”

Jajah also plans to target China, Korea, Japan, Mexico, Turkey and Brazil. The company’s largest markets are Europe and the US.