Rebtel app lets users make international calls for small bills

Rebtel lets users call internationally for cheap
Rebtel lets users call internationally for cheap   

If Rebtel has its way, international calling will go the way of WhatsApp, the popular messaging application that has more than 450 million users worldwide.

Last week, the Sweden-based mobile communications company launched Rebel Calling, a new feature that allows users to make international calls for as little as $1 per month, without a wireless connection, for app-to-app calls in 52 countries. If a person is in a more remote location where Rebel isn't available, a user can pay for unlimited calling for as little as $5 per month, or as much as $10 per month, depending on the location.

Rebtel, which has been active in the international call market for about 10 years, is aiming to challenge traditional international calling rates that are defined by high calling rates.

The company's application connects callers via computer, tablet or smartphone, turning an international call into a local call. Rebel Calling actually doesn't route calls over the Web, which in theory makes the call more stable.

"We want this service to become the real unlimited package for international calls," said Rebtel's chief marketing officer, Fredrik Wrahme, in an interview with CNBC recently. "This call, in most cases, will be better than using an international operator."

The pricing model is not unlike "Skype or Netflix," where you get unlimited use for a flat rate, Wrahme said. He said that telecommunications companies "have been overcharging for many years," often raking in margins of 80 percent or more.

Rebtel CEO Magnus Larsson characterized the market for international calls as ripe for disruption. Larsson said the $3.3 billion market for overseas calls — used mainly by immigrants and business travelers — is dominated by calling cards and international call centers to dial back home.

In some ways, those methods are inefficient and costs too much, Larsson said. Consumer advocates point out that phone cards sometimes advertise generous calling benefits, yet sometimes short change consumers.

"Our business model is attacking" both the industries of calling cards and international phone calling, Larsson said. "The ones that need it the most are the ones that pay the highest price."

Founded in 2006, the company boasts over 25 million users internationally.

Correction: The formal name of Rebtel's new calling feature is Rebel Calling.