INTERNET AND NEW MEDIA

Skype Takes Aim at Cell Phones

Skype, the Internet calling service that has more than 400 million users around the world, can make calls and send instant messages to other Skype users free, and they pay lower rates than the phone companies would charge when they use Skype to call landlines.

Skype is aggressively moving onto mobile phones. Since March 31, the wildly popular Skype, gives iPhone users everywhere the chance to use WI-FI to make cheap calls across the globe.

The free software is available for both iPhones and the iPod touch and it will also become available to BlackBerry users in May.

The mobile service will work exactly the same as the computer service. Users will be able to send instant messages for free and pay a low rate when they call other phones. But Apple will limit the service so it only works over WI-FI and not over AT&T's data network. 

The move is still seen as a direct threat to cell phone providers everywhere, according to several experts.

“The carriers are in the business of selling voice minutes,"  Ben Wood, director of Research at the London-based CCS Insight, a market research firm told the New York Times. 

"For a long time they saw products like Skype coming along and they were concerned. But it turned out a little bit different than they expected.”

Other cellular companies have already made software for those phones that works with Skype, but it does not offer all of the service’s features.

Earlier this year, Skype announced versions of its software for Nokia phones and phones running Microsoft’s Windows Mobile and Google’s Android operating systems.

The idea of bringing Skype to mobile phones has always been viewed by cellular operators as potentially threatening. It opens up the possibility that people will use their data plans to make calls using Skype, instead of the more expensive and profitable voice minutes on the carriers’ cellular networks.

“The carriers are in the business of selling voice minutes. For a long time they saw products like Skype coming along and they were concerned,” said Ben Wood, director of Research at the London-based CCS Insight, a market research firm. “But it turned out a little bit different than they expected.”

Mr. Wood said many carriers had modified their views about so-called voice-over-Internet-protocol, or VoIP, services. In some cases, Skype has proved to be appealing to consumers and a competitive advantage for a carrier over its rivals.

Skype tested its service in London in the last two years with Hutchison 3, a British mobile network. It said it drew more customers to Hutchison 3 and increased its revenue for each user, since people were making calls on their cellphones using Skype that high calling rates would have discouraged otherwise.

Scott Durchslag, Skype’s chief operating officer, said he did not think the limitations on using Skype on the iPhone would be a big drawback for users, since Wi-Fi networks have become common.

However, he said he hoped Apple and AT&T would relax restrictions and let people make Skype calls anywhere they roamed. “We think these things should work on any device, any network, at any time,” he said.

[Source: Agencies]