Between calling cards, international rate plans and voice-over-IP (VoIP) software and hardware platforms, the market for international calling is crowded with different means to achieve the same end – the cheapest phone service possible. Amongst the competitors, alternative service provider i2Telecom is adding its own VoIP variation to the mix with a patent-pending software called MyGlobalTalk. Scheduled for a hard launch in the fall, the company is positioning the technology as an inexpensive alternative for international calling.

The software, soft-launched in March, allows consumers to download Internet telephony direct to their cellular phone, regardless of their wireless carrier, handset manufacturer or service plan. The handset then becomes a dual-mode phone that can call anywhere in the world starting at two cents a minute without the need for local access to the Internet or proximity to an Internet hotspot. The technology, which uses a broadband Internet connection instead of a standard phone line, converts the phone call into data, which then travels through the Internet connection on i2Telecom’s VoIP network.

Players in the VoIP space include traditional market leader Vonage, new entrant T-Mobile and the latest success story, MagicJack. Despite some mixed reviews, the VoIP startup has experienced unprecedented success in the residential space. On the mobile side, however, Larry Stessel, chief marketing officer for i2Telecom, stressed that no company has a VoIP offering like i2Telecom’s – all others either require a piece of hardware attached to the cell phone or an access number to dial into.

That being said, the market for VoIP providers is already congested. Some are offering VoIP services as downloads, some are WAP-based, some are call-back focused and some are call-through. Any way it’s done, however, the goal of cheap international calling is the same. Yankee Group senior analyst Patrick Monaghan pointed to Packet8, TruPhone and JaJa as strong competitors, as well as alternatives coming from unlimited calling plans and tried-and-true calling cards.

“With unlimited minute plans – Cricket has a $45 per month unlimited minute plan – it is tough to compete for minutes in the US,” Monaghan said. “If you are looking at international, especially on the enterprise side, it can be a big cost saver. But they still compete against calling cards, which you’ll find heavy international users still relying on just due to simplicity – due to the fact that all they really have to do is dial a number. Even though the services are relatively easy to use, they still have to be discovered if you are in the consumer market anyways.”

To date, no mobile VoIP technology has gained any real traction in the US market, Monaghan added. Most US consumers don’t call abroad often as compared to national long distance. Furthermore, seeing that the service isn’t preloaded into the mobile handset, discoverability is a big barrier for MyGlobalTalk or any VoIP provider that requires a software download or hardware addition. If VoIP providers can get over this hump, ease of use becomes the next make-or-break feature.

“What we are seeing now is these companies like i2Telecom trying to make the application easy to use,” Monaghan said. “The consumer experience and ease of use are key to adoption. Once it has been discovered, if the consumer has a difficult time downloading it and setting it up, it will probably be three strikes and you are out. If it takes the consumer too long to set up, they will abandon it and find something else. Or go back to calling cards.”