Telefónica to offer cheap web calls

Telefónica is going head-to-head with Skype in the ultra-competitive international calling market through the Spanish telecoms group's purchase of Jajah, a Silicon Valley-based internet phone company.

This week O2, Telefónica's UK mobile phone business, is launching a low-cost international calls service for its customers. The service has been developed by Jajah, which Telefónica bought for $207m in January.