Make cheap phone calls through Google

Australians have been able to make free phone calls to landlines and mobiles using a new Google Gmail feature that launched this week for US and Canadian users.

Australians who have their Gmail language set to “English US” are able to use the Google Voice plug-in for Gmail to make calls using the microphone on their computer. The service throws down a significant challenge to Skype and traditional phone service operators.

Calls and texts to US and Canadian numbers were meant to be free with very low rates for calls to phones in other countries, but, in a loophole, Australians using the feature have been able to use the service to call Australian numbers for free. They were not charged the per-minute rate of $US0.04 and $US0.14 for landline and mobile calls, respectively.

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Google announced today that over one million calls were placed using Gmail’s free calling service in its first 24 hours.

The company was unable to explain why Australians were able to make calls for free but a spokeswoman confirmed that “Aussies who have their Gmail language set to English US will see that the feature is available to them too”.

However, the spokeswoman said only outgoing calls would work for Australians as incoming calls required the Google Voice application, which has not yet been made available to Australians. In the US, people who obtain a free phone number from Google can receive calls on their PC.

Outgoing calls can only be made via Gmail on users’ computers as a version for mobile phones has not yet been released.

Analysts said the service would likely be a bigger competitive threat to services like Skype’s than to traditional phone companies, which have already been cutting their call prices in recent years in response to stiff competition.

Skype, Google and many other services have been offering free computer-to-computer calling for years, but now Google is taking on Skype in computer-to-phone calling.

“This is a risk to Skype. It’s a competitor with a pretty good brand name,” said Hudson Square analyst Todd Rethemeier.

“Calling is so cheap already that I don’t think it will attract a huge amount of domestic calling. It could take some of the international market,” he said.

Another analyst, Steve Clement from Pacific Crest, said that anybody who is tempted by internet calling services has likely already disconnected their home phone.

“The type of person who would use a service like that isn’t the type of customer who still has a landline,” Clement said.

Google said making a call through its service works like a normal phone in that a user could click on the “call phone” option in their chat buddy list in Gmail and type in the number or enter a contact’s name.

The service is likely to significantly increase the popularity of Gmail, which is trailing Microsoft and Yahoo in the free online email stakes.