Skype Mobile Finally Launches With Free Voice Calls

IanFogg | November 17, 2006, 04:52 AM

Skype's new mobile client is completely different to its previous handheld efforts.

Skype on 3 delivers free calls to, or from, any Skype user, anywhere in the world. One user may be on a compatible 3 mobile handset the other can be on a PC. The mobile end of the voice call is carried over a circuit switched connection between the mobile handset and 3 which delivers improved sound quality (compared with the existing Windows mobile version); this also means that this Skype has to use 3’s cellular connection and will not work over WiFi. Consumers can use their existing Skype user name.

So, the end user benefit is clear: free calls to anyone anywhere, as long as they use Skype.

However, 3 has protected its voice and SMS revenues as there are limitations in what this version of Skype can do:

1. No Skype out or Skype in calls to normal telephone numbers. Also, Skype isn’t yet integrated into the N73 handset’s address book (unlike Nokia’s VoIP software on the N80i). So, there is little direct threat to 3’s voice revenues.
2. No Skype instant text messages – so no SMS competition. I’m sure this will change, as 3 is already marketing Windows Live Messenger and Yahoo! IM (interestingly neither of those have voice support).
3. No ability to receive or listen to normal Skype voicemail messages on a 3 mobile handset. I see no reason why 3 and Skype shouldn’t fix this in the future to improve the experience.

Skype benefits from the relationship as it will boost the overall number of Skype users, which increases the number of people that PC Skype users may call, and so increases the value of Skype to Skype’s current PC users. Skype will, of course, attempt to convert these new mobile Skype users to become active paying PC Skype users and also to link them in to ebay, paypal et al as well. Skype will also surely offer this solution to other mobile operators.

Consumers gain free "on-net" Skype calls, but will lack the complete Skype experience unless they connect over their PC.

While 3 now has a sexy new application with Skype, which has clear consumer benefits that it can market hard to acquire new 3 customers.

Read more about Skype in Europe or read about European operators using instant messaging as a platform.