VoIP provider emerges as alternative to Skype

When it comes to inexpensive voice, Skype has some competition in the form of Nymgo. Nymgo's plans are all pre-paid and offer calls to both landline and wireless devices. Founded in 2008 and privately held, Nymgo's VoIP-based calling plans start as low as $0.004 per minute for U.S. calls, $0.013 for calls to India and $0.008 for calls to China. By contrast, Skype charges pay-as-you-go rates of $0.021 for U. S. calls and $0.092 per minute for calls to India. Nymgo rates vary based on the country called and are higher when calling a mobile device in countries with "calling party pays" mobile plans.

We spoke recently with the company's founder, Omar Onsi. From an operational perspective, Nymgo uses leased transport from wholesale carriers like Level3 and Global Crossing, but it owns its hardware and back-office software. Nymgo supports Session Initiation Protocol (SIP)-based calls using broadband Internet connections and it has plans to launch SIP-based support for mobile devices within the next two months.

Unlike Skype -- which has increasingly been focused in recent years on business-grade IP telephony features, IP-PBX and unified communications systems integration, and other services like video calls, Onsi freely admits Nymgo is focused on "connecting calls for the cheapest rate possible" so he has avoided branching out with anything but simple SIP-based voice connectivity.

Our observations: When it comes to size and an embedded customer base, Skype (which was founded in 2003) has the early-entry advantage. Skype's market share gains in seven years have been impressive. For example, Skype claimed it had acquired 12% of global international calling minutes in Q3 2009 when its users made 3.1 billion minutes of calls to landlines and mobiles. In contrast, Nymgo has accrued 200 million minutes on its network since it was founded in 2008. But Nymgo clearly has the better pay-as-you-go rates between the two companies, and its progress as a competitor (and an alternative VoIP provider to Skype) bears watching.