News : I2 Telecom offers cheap calls via mobile phones

SAN FRANCISCO (Reuters) - An upstart Internet telephone company has introduced a method for U.S. mobile telephone users to call land line phones around the world for as little as two-cents a minute on top of basic rates.

I2 Telecom International Inc of Roswell, Georgia, said on Monday its calling service, myglobaltalk.com, lets smartphones such as the latest models of Research in Motion Ltd's Blackberry e-mail phone place direct calls overseas.

The i2 service also works with other smartphones with data transmission plans, including the Samsung Electronics Co Ltd Blackjack, Palm Inc Treo and the Motorola Inc Moto Q. The company said it is seeking approval from Apple Inc to offer the service via iPhones.

The service, which requires users to be able to download i2 software to their phones, costs as little as two to three cents a minute to reach fixed lines on top of normal U.S. domestic charges. Calls to countries with higher tariffs can cost much more and calls to mobile phones in other countries are also more expensive, the company said.

Rival Voice over Internet Protocol (VOIP) mobile phone companies require a call to the company's access switch and then place a second phone call, company executives said.

"It looks like a very interesting product which has an opportunity to be financially successful for the company," said Colby Synesael, an analyst with Merriman Curhan Ford & Co.

"What remains in question is what the company's distribution strategy will be and how big the potential market is for this product."

I2 Telecom boasts it has few competitors for its service, which requires only a single call. That can mean one-touch dialing for numbers stored in the phone's address book.

Synesael, who does not cover the company, but has followed it informally for several years, said the only company with a head-to-head competing product is 8x8 Inc, which sells its service under the Packet8 label.

I2 Telecom Chief Executive Paul Arena said his company is focused on selling the service to recent immigrants seeking to dial around more expensive phone plans offered by traditional carriers. Immigrants often pay high rates using phone cards or to dial home from specialized overseas calling shops.

He said his approach is cheaper and simpler because rates are lower and there are no connection charges.

"We just put a simple application on the phone that is seamless to the user," he said of his Web-based alternative.

For now, the per minute prices are even less expensive than those for MobileTalk by Packet8, but Packet8 already has permission from Apple to offer its own service via the iPhone.

(Reporting by David Lawsky; Editing by Andre Grenon)