Similar to Skype, Rebtel offers mobile-to-mobile calling around the world with no download or active WiFi connection required. The first call is always free. In addition, users can also pay for the service through their Skype accounts and if the receiver is also a Rebtel customer, the call can be made free of charge.

New users can create an account online and prepay funds charged in US dollars into the account. VAT is added for users in the EU. After the user registers the desired phone number on the website, Rebtel creates a unique local phone number for the user that reroutes the call to the destination.

By leveraging local numbers instead of an active internet connection to make international calls, Rebtel allows users to reach anyone around the world by phone anytime.

As Rebtel’s operational controller Mikael Rosengren explains, founder Hjalmar Windbladh came up with the idea after learning the hard way about how expensive international calling can get.

“He was on a long international trip and his biggest expense was calling home because of the extremely high rates, so he wanted to find an alternative,” Rosengren recalls.

“Our main user groups are first-generation immigrants or exchange students who don’t really travel, but have moved abroad for a short or long period of time. Those are the people who are more interested in what they pay every month,” he adds.

Calling cards are one of Rebtel’s main competitors, Rosengren explains. The company’s aim is to try to take a bigger slice of that market.

“Skype and Localphone have similar services to ours, regular operators as well, but they’re not so much to compete against,” he says. “People who are concerned about their costs never call with them, but most people still do.”

Rebtel calls can cost up to 95 percent less than competitors. In addition to its prices, Rebtel is committed to constantly improving the quality of its service.

“We do a lot of quality testing to make sure nothing is substandard,” Rosengren explains.

The company buys traffic from telephone operators, then sells it for a fee. Since its launch five years ago, over 7.5 million accounts have been created.

Rebtel’s target customers are men aged 25 to 40 who are frugal mobile phone users and familiar with calling and credit cards. They tend to use the service for private calls and many are first-generation immigrants who do not have strong local language skills.

They are also internet-savvy and eager to try new technologies. In addition, they tend to be the financial providers for their families and use the service frequently.

These customers in particular benefit from the free call service that Rebtel provides. These calls are initiated the same way as direct calls. If the person on the receiving end of the call also uses Rebtel, the call is automatically detected as a free call.

The Rebtel app running on the device at the receiving end of the call recognizes that another Rebtel user is making the call and fully automates the hangup and callback process. The international part of the call is completely free of charge.

In addition to offering cheap international calling, Rebtel provides significant savings for SMS. Users can simply select a contact from their address book, compose their message within the mobile and choose to attach an optional “collect reply” link.

The attached collect reply link gives the contact on the receiving end the option to reply free of charge through a mobile webpage. The user that sends the initial message covers the cost for the reply.

If both the user and contact live in Rebtel countries, but the contact is not a Rebtel user, the contact can use Rebtel to make collect or reverse-charge calls to the user. The contact can call collect by using the local number sent by email when the user adds the phone number. The local number can also be sent by SMS to the user or friend as well.

Separately, if a user does not want to create a Rebtel number for someone, such as in the case of dialling an international number that will only be used once, such as a hotel, one can double dial. Just call the Rebtel operator and follow the instructions. Usual fees apply.